The Diffusion of Double Entry Bookkeeping before 1800—Establishing a New Research Agenda

ABSTRACT This paper adopts a traditional critical-historical research methodology focusing on context and function to investigate and explain the factors that led to widespread adoption and diffusion of double entry bookkeeping within and beyond its Italian roots before 1800. It finds double entry facilitated use of credit in the face of shortage of coinage. Its use spread among moneychanger-bankers at regional fairs across northern Italy, and from there to merchants and into communities of that region. Migration of Italian international-merchant-bankers across Europe led to its diffusion into clearing at the major international trade and financial markets they controlled, together with the system of bills of exchange they devised to facilitate settlement of obligations. Its use became mandatory at fairs along with bills of exchange, diffusing into the permanent early modern centers of trade and finance in Amsterdam and London, while increasing availability of resources to learn the method completed the process.