Institutions, Trade and Growth: the Ancient Greek Case of Proxenia
46 Pages Posted: 28 Sep 2021 Last revised: 2 Jan 2023
Date Written: June 1, 2021
Recent scholarship contends that ancient Mediterranean economies grew intensively. An explanation is Smithian growth spurred by reductions in transaction costs and increased trade flows. This paper argues that an ancient Greek institution, proxenia, was among the innovations that allowed such growth in the period 500-0 BCE. Proxenia entailed a Greek city-state declaring a foreigner to be its ‘public friend’, a status that conferred both duties and privileges. Arguably, the functions performed by ‘public friends’ could facilitate economic transactions between communities. Accordingly, network and regression analyses establish a strong relation between proxenia grants and trade intensity.
Keywords: institutions, economic growth, trade, transaction costs, ancient Greece, proxenia, proxeny
JEL Classification: N73, D23, O43
Suggested Citation: Suggested Citation