Why No Sustained Growth in Ancient Societies?

The Long Stagnation: GDP Per Capita

Population Growth: Another View of Stagnation

World population over the long run. Source: Our World in Data, based on HYDE and UN Population Division.

Guiding Questions for Today

How did political institutions emerge from forager bands?

Learning Objectives

By the end of this lecture, you should be able to:

1. Define institutions; distinguish formal vs informal constraints
2. Explain Boix’s producer–looter model of state formation
3. Apply Allen’s induced innovation hypothesis to cases
4. Compare Mesopotamia, Rome, and Han China
5. Evaluate critiques and propose empirical tests

Roadmap

Part 1: Motivation and objectives

What Are Institutions? (North, 1990)

“Humanly devised constraints that structure political, economic, and social interaction”

Two Institutional Archetypes (Acemoglu & Robinson, 2012)

The Boix Model: Producers vs Looters (2015)

Forager societies: egalitarian, mobile, low storage

The Producer-Looter Pathways

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flowchart LR
    A["Agricultural<br/>Transition"] --> B["Fixed, Storable<br/>Surplus"]
    B --> C["Predation<br/>Becomes Viable"]
    C --> D{"Produce<br/>or Loot?"}
    D -->|Produce| E["Demand for<br/>Protection"]
    D -->|Loot| F["Raiding &<br/>Extraction"]
    E --> G["State<br/>Emerges"]
    F --> G

Agriculture changed the payoff structure, not human nature (Boix, 2015)

Case Evidence: Producer-Looter Model

1. Why states emerged after the Neolithic revolution?
2. What is they key mechanism that replaced surplus for state formation?
3. Why are cereals easier to appropriate than roots and tubers?
4. Why does cereal cultivation simultaneously create both the demand for a state and the means to finance it?

Archaeological Evidence: Heights as Inequality Proxy

Did Agriculture Make People Worse Off?

Male skeletal heights declined after the Neolithic transition. Source: Based on Angel (1984); Steckel (2008).

The height decline is consistent with the emergence of extractive hierarchies.

The Boix Causal Framework

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flowchart LR
    A["Geography<br/>& Ecology"] --> B["Surplus<br/>Concentration"]
    B --> C["Predation Risk<br/>(Producer-Looter)"]
    C --> D["State &<br/>Institutions"]
    D --> E["Security &<br/>Property Rights"]
    E --> F["Innovation<br/>Incentives"]
    F --> G["Development<br/>Outcome"]

Geography operates through institutions, not directly (Boix, 2015)

Factor Prices and Innovation (Allen, 2009)

Innovation is not random — it responds to incentives

Allen’s Induced Innovation Mechanism

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flowchart LR
    A["Relative<br/>Factor Prices"] --> B{"Which factor<br/>is expensive?"}
    B -->|"High Wages<br/>Cheap Energy"| C["Labor-Saving,<br/>Energy-Intensive<br/>Machines"]
    B -->|"Low Wages<br/>Cheap Labor"| D["Labor-Intensive<br/>Methods;<br/>No Mechanization"]
    B -->|"High Energy<br/>Costs"| E["Energy-Saving<br/>Technology"]
    C --> F["e.g. Britain:<br/>Steam Engine"]
    D --> G["e.g. India, China:<br/>Hand Production"]
    E --> H["e.g. Fuel-Efficient<br/>Furnaces"]

Same technology: rational in one price context, irrational in another (Allen, 2009)

Allen’s High-Wage Economy Thesis

Integrated Boix-Allen Framework

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flowchart LR

A["Geography<br/>& Climate"] --> B["Agricultural<br/>Potential"]
B --> C["Producer–Looter<br/>Dynamics"]
C --> D["Institutions<br/>(Type)"]

subgraph BOIX["Boix: Institutional Structure"]
direction TB
D --> E["Labor Systems<br/>Slavery?"]
D --> F["Property Rights<br/>Secure?"]
D --> G["Market Access<br/>Open?"]
end

E --> H
F --> H
G --> H

subgraph ALLEN["Allen: Prices → Technology"]
direction TB
H["Factor Prices"] --> I["Innovation Direction"]
I --> J["Economic Performance"]
end

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Extractive institutions distort price signals → weak mechanization incentives

State Capacity: Necessary but Not Sufficient

States can promote innovation: infrastructure, property rights

Vocabulary Check

Exercise 1: Apply the Producer-Looter Model

Prompt: Pick a modern developing country you know well.

Three Ancient Societies, Three Paths

Different paths, same stagnation outcome — why?

Three Ancient Societies, Three Paths

Corvée: compulsory unpaid labor owed to the state, often for public works.

Mesopotamia: Between the Rivers

1. What geographic features made Mesopotamia suitable for early agricultural development?
2. What did cuneiform originally develop to track before it became a full writing system?
3. Name two Mesopotamian innovations in mathematics or astronomy that we still use today.

Mesopotamia: Between the Rivers

Mesopotamian Institutions and Innovation

Mesopotamian Institutions and Innovation

Rome: From Republic to Empire

The Roman Paradox

Why Rome Didn’t Mechanize (Allen’s Logic)

Massive slavery → very cheap labor

Factor Prices: Why Institutions Matter for Innovation

Han China: Bureaucratic Capacity

Han China: Bureaucratic Capacity

Chinese Innovation Under the Han

The Needham Question

Common Pattern Across All Three Cases

Despite different paths, all reached similar stagnation

Path Dependence and Institutional Lock-In

Path dependence: early choices constrain later possibilities, making institutional change costly

Vocabulary Check II

Critique 1: Geographic Determinism?

Critique: Boix overweights geography

Critique 2: Culture and Ideas

Mokyr (2016): Enlightenment ideas enabled sustained innovation

Critique 3: Reverse Causation

Do institutions cause growth — or does growth enable institutions?

Critique 4: Oversimplification

Extractive/inclusive binary can be too simplistic

What Would Change My Mind?

Sustained growth under clearly extractive institutions

Exercise 2: Evaluate the Strongest Critique

Prompt: Which of the four critiques do you find most compelling?

Discussion Questions

Can institutions be reformed by design, or must conditions shift?