Working Paper: CEPR ID: DP8548
Authors: Joram Mayshar; Omer Moav; Zvika Neeman
Abstract: We propose a general theory that explains the extent of the state and accounts for related institutions as byproducts of the state's extractive technology. We posit further that this extractive technology is determined by the transparency of the production technology. This theory is applied to examine two principal phases in the evolution of the early state. First, we argue that the common explanation of the emergence of the state as a consequence of the availability of food surplus due to the Neolithic Revolution is flawed, since it ignores Malthusian considerations. In contrast, we suggest that what led to the emergence of the state was a transformation of the tax technology that was induced by the greater transparency of the new farming technology. We then apply our theory to explain key institutional features that distinguished ancient Egypt from ancient Mesopotamia, and, in particular, to explain their different land tenure regimes.
Keywords: Appropriability; Institutions; Land Tenure; The Early State; Transparency
JEL Codes: D02; D82; H10; O43
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Greater transparency (G38) | Reliance on punitive measures (H84) |
| Greater transparency (G38) | Reduction in agent's remuneration (L85) |
| Greater transparency (G38) | Increased likelihood of dismissal for poor performance (J63) |
| Increased transparency (G38) | More effective tax collection by the state (H26) |
| More effective tax collection by the state (H26) | Shift from voluntary tax contributions to coercive taxation (H26) |
| Ability to appropriate agricultural surplus (P32) | Emergence of social hierarchies and state institutions (O17) |
| Greater transparency (G38) | Evolution of institutional frameworks (O17) |