Abstract

AbstractWe develop a theory of state formation shedding light on the rise of the first stable state institutions in Bronze Age Mesopotamia. Our analysis suggests that the mix of adverse production conditions and unforeseen innovations pushed groups favored by old technologies to establish the state by granting political and property rights to powerless individuals endowed with new and complementary skills. Through these reforms, the elite convinced the nonelite that a sufficient part of the returns on joint investments would be shared via public spending and, thus, to cooperate and accumulate a culture of cooperation. Different from the main alternative theories, we stress that: (1) group formation is heavily shaped by unforeseen shocks to the returns on both risk-sharing and innovation; (2) complementarity in group-specific skills, and not violence, is key determinant of state formation; (3) military, merchant and, especially, religious ranks favored state formation and culture accumulation.

Highlights

  • The central question of social sciences is how the state’s institutional capacity to provide public goods and incentivize risk-sharing and innovation arises

  • To help fill this gap, we build on a growing literature on the institutional roles of the elite’s inability to commit to direct transfers and the complementarity in group-specific skills (Benati et al, 2020; Boranbay and Guerriero, 2019), and we develop a theory of state formation shedding light on the rise of the first stable state institutions in Bronze Age Mesopotamia

  • The facts about Bronze Age Mesopotamia consistent with our theory are: [a] group formation is heavily shaped by unforeseen shocks to the returns on risk-sharing and innovation; [b] complementarity in group-specific skills is key determinant of state formation; [c] military, merchant and, especially, religious ranks favored reforms toward stronger nonelites’ rights and the spread of a culture of cooperation and [d] access to violence is not a crucial institutional engine

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Summary

Introduction

The central question of social sciences is how the state’s institutional capacity to provide public goods and incentivize risk-sharing and innovation arises. Despite the relevance of this issue (Acemoglu and Robinson, 2012; Boix, 2015; North et al, 2009), we still lack an organic and empirically sound theory of the determinants of the distribution of power among social groups and their incentives to share it for the purpose of economic cooperation To help fill this gap, we build on a growing literature on the institutional roles of the elite’s inability to commit to direct transfers and the complementarity in group-specific skills (Benati et al, 2020; Boranbay and Guerriero, 2019), and we develop a theory of state formation shedding light on the rise of the first stable state institutions in Bronze Age Mesopotamia.

The origins of the state in Bronze Age Mesopotamia: stylized facts
Theoretical framework
Conclusions
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