Trade and the Rise of Ancient Greek City-States

Abstract

In this paper, I examine the role of comparative advantage in the rise of city-states. After compiling a new dataset on ancient Greece and the natural environment, I provide evidence that the spatial diversity of natural vegetation endowments amongst potential trading partners is important for explaining the development of coined money, battle entry, and city-state formation. I also provide statistical evidence against previously emphasized ``key factors''. These findings are consistent with a unified model of comparative advantage that I develop, which clarifies how the spatial diversity of factor endowments affects multiple development outcomes.

Keywords: ancient Greek city-states, city-state formation, potential crop diversity, spatial-covariance

JEL Classification: N94, F11, F51