The Origins of the State: Technology, Cooperation and Institutions

29 Pages Posted: 25 Jun 2020

See all articles by Giacomo Benati

Giacomo Benati

Università di Bologna - Alma Mater Studiorum Università di Bologna

Carmine Guerriero

Department of Economics, University of Bologna

Date Written: June 2, 2020

Abstract

Despite the vast evidence on the economic relevance of the state's institutional capacity to provide public goods and incentivize trade and investment, we lack an integrated and empirically sound theory of its origins. To help fill this gap, we study the first forms of stable state institutions observed in Bronze Age Mesopotamia. Our analysis suggests that the mix of adverse geographic conditions and unforeseen innovations pushed groups favored by old technologies to grant stronger political and property rights to those endowed with new and complementary skills. These reforms convinced the nonelites that a sufficient part of the returns on joint investment would have been shared via public spending and, thus, to both cooperate and accumulate a culture of cooperation. Different from the alternative theories of state formation, we highlight that: 1) elites and nonelites endogenously arise because of technological shocks shaping organizational skills, warfare and trade and/or investment activities; 2) heterogeneity in group-specific skills is a key determinant of reforms towards stronger nonelites' political and property rights; 3) military, merchant, and especially, religious ranks eased reforms towards stronger nonelites' rights and the spread of a culture of cooperation; 4) access to violence is not a key engine of institutional evolution.

Keywords: Geography; Time-Inconsistency; State-building; Culture of Cooperation.

JEL Classification: O13, H10, D23

Suggested Citation

Benati, Giacomo and Guerriero, Carmine, The Origins of the State: Technology, Cooperation and Institutions (June 2, 2020). Available at SSRN: https://ssrn.com/abstract=3582116 or http://dx.doi.org/10.2139/ssrn.3582116

Giacomo Benati

Università di Bologna - Alma Mater Studiorum Università di Bologna ( email )

Bologna
Italy

Carmine Guerriero (Contact Author)

Department of Economics, University of Bologna ( email )

Strada Maggiore 45
Bologna, 40125
Italy

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