Working Paper: CEPR ID: DP9625
Authors: Joram Mayshar; Omer Moav; Zvika Neeman
Abstract: We propose a theory by which geographic variations in the transparency of the production process explain cross-regional differences in the scale of the state, in its hierarchical structure, and in property rights over land. The key linkage between geography and these institutions, we posit, is via the effect of transparency on the state's extractive capacity. We apply our theory to explain institutional differences between ancient Egypt and ancient Upper and Lower Mesopotamia. We also discuss the relevance of our theory to analyses of the deep rooted factors affecting economic development and the growth of taxation in the modern age.
Keywords: geography; institutions; land tenure; state capacity; state concentration; 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 |
|---|---|
| transparency (G38) | state capacity (H11) |
| transparency (G38) | efficient extraction of resources (Q30) |
| efficient extraction of resources (Q30) | state capacity (H11) |
| state capacity (H11) | property rights (P14) |
| transparency (G38) | institutional stability (P16) |
| opacity of agricultural practices (Q18) | hindered state capacity (H11) |