COMPARATIVEECONOMICHISTORY.

GerardRoland

UCBerkeley,CEPRandNBER

Keywords:economichistory,culture,institutions,individualism,collectivism,propertyrightsJEL:N00,P40,P50Abstract:Weexploreinthischapteranewdirectionincomparativeeconomics:comparativeeconomichistory.Buildingonresearchbyarcheologistsandeconomichistorians,wesurveysomeoftheworkondifferencesininstitutionsintheancientpast.Wereportonanoveldata-gatheringexerciseoninstitutionsinantiquity,findingtwoclearclusters:withsomesystemswecall“statist”systems,likeinancientEgyptorChina,whichreliedonsomeformofcentralplanningintheallocationofresources,withverylittleprivateproperty,whileothersocietieshadthrivingmarketsystemswithstrongprivatepropertyrights.Thedifferencebetweentheseinstitutionsinantiquitycanberelatedtodifferencesbetweenindividualistandcollectivistculturesthatplayanimportantroleinthemodernworld.

1.IntroductionComparativeeconomicshasundergonemanychangessinceitwascreatedduringthecoldwarinthetwentiethcentury.Themainfocusofcomparativeeconomicsthenwasthestudyofthesocialisteconomicsystem,whereallocationofresourceswasnotdonethroughthemarketbutthroughcentralplanningandwhereownershipofproductiveassetswaspublic,notprivate.Comparativeeconomicswasthencomparativeonlyinthesensethatthesocialisteconomicsystemwascomparedtothecapitalisteconomicsystem,buttherewasatthetimelittlefocusontryingtounderstandmoredeeplytheworkingsofthecapitalisteconomicsystemitself.Somescholarstriedthentoestablishanabstractframeworkservingasalensforcomparingeconomicsystemsingeneral(seee.g.Kornai,1971;Montias,1976;NeubergerandDuffy,1976).WiththecollapseofthesocialisteconomicsystemaroundtheFalloftheBerlinwallin1989,thefocusofcomparativeeconomicsimmediatelyshiftedtothestudyofthetransitionfromthesocialisteconomicsystemtothecapitalisteconomicsystem(seee.g.Roland,2000;BerglofandRoland,2007).Therewaslittlerealcomparativeeconomicsduringthisperiod,exceptforthefactthatoneneededtohavesomeunderstandingofthecapitalisteconomicsysteminordertobeabletounderstandandevaluatetransitionstrategies.Sincethetransitionfromsocialismtocapitalismhadneverhappenedbefore,therewaslittlepriorunderstandingofhowtoconductthetransitionorwhattheeffectsoftransitionpolicieswouldbe.Asaconsequence,thereweremanyunexpectedsurprisesinrelationtothetransitionprocess,theoutputfallfollowingpriceliberalizationbeingonlyoneofthem(seeBlanchardandKremer,1997;RolandandVerdier,1999).Themistakesandsurprisesofthetransitionprocessledtoabetterunderstandingofthenatureofthecapitalistsystem,andinparticularthecentralroleofinstitutions.TheideasofNorth(1990)andWilliamson(1975)amongothersthathadfortoolongplayedaperipheralroleineconomicsthenbecamemainstream.ThearticlebyAcemogluetal.(2001)analyzingthefundamentalroleofinstitutionsinlongrungrowth,usingmoderninstrumentalvariabletechniques,becameaninstantclassic.Thefocusofcomparativeeconomicsthenshiftedtothestudyofcomparativeinstitutionalanalysis,i.e.thecomparisonofinstitutionsfocusingondifferencesininstitutionsincapitalistcountries.1Djankovetal.(2003)calledthisthe“newcomparativeeconomics”andAoki(2001)proposedaratherabstractconceptualframeworkbasedongametheorytounderstandbothinstitutionsandinstitutionalchange.Itistheonlybooktomyknowledgethathasattemptedtoprovideacomprehensivecomparativeanalysisofinstitutions.Otherresearchinlinewiththenewfocusofcomparativeeconomicshasbeenbothquiteprolificandvisible.1Inpoliticalscience,the“varietiesofcapitalismliterature”emergedinasomewhatparallelway.2Infacttheemergenceofamarketeconomyunderacommunistpoliticalregime

Oneareahasbeenthecomparativeanalysisoflegalsystems,especiallythedifferencesbetweencommonlawandcivillawsystems(seee.g.LaPortaetal.1998),exploitingthefactthatformerBritishcolonieshadacommonlawsystemwhereasformerSpanishandFrenchcolonieshadacivillawsystem.Anotherlineofresearchhastodowiththecomparativeanalysisofpoliticalsystems.Thisresearchhassofarbeenconfinedtothecomparisonofdemocraticpoliticalinstitutionsandtheireconomiceffects.Perssonetal.(1997,2000)studiedthedifferencesbetweenparliamentaryandpresidentialdemocracieslookingatthetrade-offbetweenseparationofpowersandlegislativecohesion.LizzeriandPersico(2001),PerottiandRostagno(2002),Perssonetal.(2007)studiedtheeconomiceffectsofdifferencesinelectoralsystemsinparliamentarydemocracies(proportionalversusmajoritarian).Otherresearchhasfocusedonthedifferencesinpoliticalregimesemergingfromruralversusurbaninsurgencies(WantchekonandGarcia-Ponce,2013).Amorerecentlineofresearchrelatestothecomparativeanalysisofculture.Sometimesscholarstendtoopposecultureandinstitutions,buttheinstitutionalistschoolconsidersthattheyarebothinstitutions,thelatterbeingformalandtheformerbeinginformalinstitutions.Muchofthecomparativeresearchonculturebyeconomistshasfocusedondifferencesingeneralizedtrust,sometimesalsointerpretedasgeneralizedmoralityorcivicculture(seee.g.surveysofthislargeliteraturebyGuisoetal.,2006;Tabellini,2008)butalsoondifferencesbetweenindividualistandcollectivistcultures(GorodnichenkoandRoland,2011,2012,2015,2017;Gorodnichenkoetal.,2015;Kyriacou,2015,Ahujaetal.2017,Davis,2016,DavisandWilliamson,2019,Hartingeretal.2019andmanyothers).Theeconomiceffectsofotherculturaldifferenceshavebeenstudiedsuchasfertilitynormsorgendernormsforlaborsupply(Fernandezetal.,2004;FernandezandFogli,2009).Aswecansee,thenewcomparativeeconomicshasfocusedmostlyonunderstandingthedifferencesininstitutionsinthepost–coldwarworld.Becauseofthenatureofthisresearch,itgivealesspolarizedviewofinstitutionalsystemscomparedtotheearlycomparativeeconomicsofthecoldwar.However,thereisnoreasonwhythenewcomparativeeconomicsshouldfocusonlyoncontemporaryinstitutions.Whataboutcomparativeanalysisofeconomicsystemsfartherbackinhistory?Inthepre-industrialera,i.e.inpost-neolithicagrariansocieties,therewereimportantinstitutionalandculturaldifferences,possiblyasimportantasthedifferencesstudiedbytheearlycomparativeeconomics.Thesedifferenceshavebarelybeenstudied,buttheymayaffectdevelopmentsinthetwentyfirstcentury,andevenbeyond.Chinaistheemergingpowerofthe21stcentury.TheUS-Chinatradewarisalreadybecomingoneofthemajorissuesofcurrentinternationalrelations.TounderstandcontemporaryChina,amarketeconomywithacommunistpoliticalregime,itisnotenoughtostudy

communismasapoliticalsystem.2OneneedstounderstandChinesecultureanditshistory,butalsothelonghistoryofitsspecificinstitutions3.EconomichistoryhasalsodonelittletofillthisgapasithasinthepastfocusedtoomuchonhistoryintheWesternworldandtheMediterranean,andthefocushasoftenbeentotrytounderstandthesourcesofeconomicsuccess.Thesamecannotbesaidnecessarilyforpoliticalhistory(seeforexampleFukuyama’s(2012,2015)monumentalhistoricalwork.ThethreevolumesofFiner’sHistoryofGovernmentprovideawealthofencyclopedicknowledgeaboutinstitutionsinallmajorcivilizationsoftheworld.Theyareaninvaluablesourceofscholarshiptounderstandinstitutionsinthepast.Finer’sworkisinmyviewoneofthemajorachievementsinsocialsciencesinthetwentiethcentury.Abroadergeographicalviewofhistorygivesscopeforabroaderresearchagenda,asittendstoshowusthatthereisnouniquewayinwhichtheevolutionoftechnologyledtopre-determinedchangesininstitutions.Theremaybeparallelhistoricalpathsorevenbifurcations.Thereasonfordiversityforinstitutionalpathsofpre-industrialsocietieshasbeenneglectedbyresearcherswhohavefocusedonotherimportantquestionssuchaswhystatesformedearlierinsomeareasthaninothers(Bockstetteetal.2002;Carneiro,1970;Turchin,2016:Schoenholzer.2017;Maysharetal.2015;Dalboetal.2015).Muchoftheliteratureoninstitutionstakestheimplicitorexplicitviewof“good”versus“bad”institutions,“inclusive”versus“predatory”(AcemogluandRobinson,2012,seealsoAcemogluandRobinson,2019).Ifwetakealessnormativeapproach(apositiveapproach),werealizethattherehasbeeninhistoryalargediversityofinstitutions,notalleasilyclassifiableinbroadnormativegroups.Theinterestintheroleofinstitutionsineconomichistoryhasledtodiscoveryofdiversityofinstitutionsinantiquity,inpre-industrialandpre-modernsocieties.Thisleadsusthustofavoracomparativeapproachinthestudyofinstitutionsinantiquityandinpre-industrialsocieties.Overall,onecanfindatthetimeofformationofthefirststatesdifferencesbetweeneconomicsystemsthatcouldbeasstarkasthosestudiedbyearlycomparativeeconomicsfocusingonthetwentiethcentury.Thus,lookingmorecloselyattheancientworld,wefindthatsomesystems(Egypt,China,PeruundertheIncasandothers)weremorelikecentrallyplannedeconomies.Therewasnoprivatepropertyofland(thelandbelongedtotheEmperororruler),agriculturalgoodsandcraftgoodswereallocatedbythegovernment.Marketswerehardlydevelopedandforeigntradewasunderthecontrolofgovernment.Othereconomies,likeancientMesopotamia,Athens,theAztecsinMexico,theChampa(coveringroughlytoday’s2Infacttheemergenceofamarketeconomyunderacommunistpoliticalregimecouldnothavebeenpredicted,basedonlyonunderstandingcommunistideologyoreventheLeninistformoforganization3OnthenatureofthecurrentChineseeconomicsystem,seeRoland(2019).

SouthVietnam)weremoreclearlymarketeconomieswithprivatepropertyoflandanddevelopedmarkets,bothdomesticallyandinternationally.Manyothersystemswereinbetweenboththesesystems.Nevertheless,asIwillshow,differencesininstitutionswerenotdistributedrandomly.Infact,wefindtwoclearclusterswithcharacteristicsthatarereminiscentofcentralplanningononhand,andmarketeconomiesontheotherhand.Thesetwodistinctinstitutionalclustersthatarecomparabletothedifferencebetweensocialismandcapitalisminthetwentiethcenturyindicatethattheseweredifferentsystemswithcomplementaritiesbetweentheirowninstitutions.Thesedifferentsystemsoperatedinmostlyruralsocietieswheremodernindustrialtechnologywasabsentandwherelabor(inparticularslavelabor)andlandwerethemajorfactorsofproduction,andonecanmakethecaseforhowthesecomplementaritiesworked,i.e.howpartialinstitutionsreinforcedeachother,thuscreatingclearlyidentifiableanddistinctinstitutionalsystemsthat,followingRoland(2017),Iwillcallmarketversusstatistsystems.Legalarrangementsrelativetolandandlaborwereforexamplequitedifferent.Inmarketsystems,therewasprivatepropertyoflandbutalsoofslaves.Instatistsystems,slaveswerealsousedextensively,buttheyworkedforthestate.Householdsdidnothavetherighttobuyandsellslavesandtherewerenoprivatemarketsforslaves.Instatistsystems,landwasownedbythestateandtherewasnomarketforland.Inmarketsystems,legalsystemsweredesignedtodealwithhorizontalconflictsbetweencitizens,inparticularoverpropertyrightdisputes.Instatistsystems,thelawwasessentiallyatoolfortherulertooppresscitizens,asinChina’s“legalist”doctrinedevelopedduringtheQindynasty.Therewerealsomarkeddifferencesinpoliticalinstitutionsinmarketversusstatistsystems.Marketsystemswereoftenorganizedincity-states,likeinMesopotamia,ancientGreeceandRome,theChampaEmpireinSouthVietnamortheAzteccity-statesinMexico.Statistsystems,incontrast,wereusuallyorganizedinterritorialstateslikeancientEgypt,China,ortheIncaEmpire.Thelatterwerealsomuchmorecentralizedandhadlessdevelopedcities,exceptforadministrativecenters.Giventheselegalandpoliticalinstitutions,tradeofprivategoods,withinandacrosspolities,wasmuchmoredevelopedinmarketsystemscomparedtostatistsystems.Therewerealsoimportantsociologicaldifferences,someaconsequenceofinstitutionaldifferences,othersmoreasourceofthosedifferences.Theroleofmerchantswasmuchmorerecognizedinmarketsystemscomparedtostatistsystems.Therewasalsomoreethnicdiversityandtolerancetowardsforeigners.Differencesinkinshipsystemswerealsoquitenotable.Marketsystemsweremorepresentinplaceswithbilinealkinshipsystems,whereasstatistsystemscouldbefoundmorefrequentlyinplaceswithunilinealkinshipsystems.Strengthofclanalsoaffectedthestrengthofmarketdevelopment.Insocietieswithstrongclans,alotofeconomicactivitiesweredoneinsidetheclan,onthebasisofdivisionoftaskswithintheclan.Insocietieswithweakerclans,peopleneededtoresortmoretothemarketfortheirproductionandconsumption.

Thenewresearchprogramlaidoutbythecomparativeanalysisofinstitutionsintheancientpastmayhelptorevivecomparativeeconomicsbyimprovingourunderstandingofthediversityofinstitutionsintheancientpast,thereasonsfortheiremergenceaswellastheireffectsoneconomictrajectoriesinhistory,therebysubstantiallyenrichingeconomichistoryresearchoninstitutions.Thiswouldopenmanyavenuessuchas:understandingthediversityofinstitutionsintoday’sworld,understandingdifferentculturaltrajectories(suchasthemajordifferencebetweenindividualistandcollectivistcultures),understandingbettereconomicsystemsunderstoodascomplementaritiesbetweenvariousinstitutions(oneexamplewouldthelinkbetweenthecastesystem,religiousbeliefsandmarriageinstitutionsinIndia).Theobjectiveofthischapteristopresentanoverviewofthisnascentliterature,frompossibledatasourcestoemergingresearchavenues.Insection2,wethussurveysomeworkoncomparativearcheology,aninvaluablesourcetounderstandinstitutionsintheancientpast.Insection3,wesurveysomeinitialworkfromcomparativepsychologyandbiologyonpossiblereasonsforwhyspecificculturesevolvedinparticularenvironments.Insection4,wereviewtheemergingliteratureoncomparativeinstitutionsinhistory.Insection5,wedescribethecomprehensivedatabasewehavebeenbuildingoninstitutionsintheancientworld.Wealsoreviewsomeofthemainquestionsraisedinthisnewresearchprogram,includingpossiblelinksbetweeninstitutionsinancienttimesandmoderncultures.Section6concludes.2.ComparativearcheologyArcheologyfocusesgenerallyonrigorousexcavationandanalysisoffindingsfromancientsites.Itisrarethatarcheologistsattempttomakebroadtheoreticalsynthesesfromtheirobservations.BruceTrigger,afamousarcheologist,butalsoanthropologistandethno-historianpublishedamajorworkincomparativearcheologyin2003entitledUnderstandingEarlyCivilizations:AComparativeStudy.Triggercomparessevenimportantancientcivilizations(Egyptbetween2700and1800BC,SouthernMesopotamiabetween2500and1600BC,theShangdynastyinChina(1200-950BC),theMexicovalley-wheretheAztecruled–between1400and1500CE,theMayacivilizationbetween250and800CE,theIncainPeruaround1500,theYorubakingdominBeninbetween170and1800CE).Thebookreadsabitlikeanexcelfile.In27distinctchapters,Triggerdescribesforeachofthesesevencivilizationswhatheseesasimportantvariables.Iwilllistonlythemostimportantones:kingshiprules,whetherstateswereterritorialorcity-states,thetypeofurbandevelopment(inparticularadministrativecitiesversuscommercialcities),thecharacteristicsofclasssystemsandthedegreeofsocialmobility,patternsoffamilyorganizationandgenderroles,includingkinshiprules,inheritancerules,characteristicsofgovernmentadministrationsuchasthedegreeofcentralizationanddecentralization,characteristicsofthelegalsystemsuchasthelegalcodeandlegalproceduresandrelationsbetweenthelawandthesocialhierarchy,military

organizationandreasonsforgoingtowar,geographicalsurroundings,typesofimplements,rulesforlandownership,privateorpublicnatureofforeigntrade,modesoftransport,characteristicsofcraftproduction,ideallifestylesandrolemodelsversusmodelsnottofollow,conceptionsofthesupernatural,religion,artandarchitecture.WhileTriggerdoesnottheorizethatmuch,thewayheorganizeshismaterialmakesitpronetoquantification.HisworkhasbeenamajorsourceofinspirationforthedatacollectionIreportbelow.WhileIknowofnoothercomparativeworkasimpressiveasthatofTrigger,thereismoreandmoreworkbyarcheologistsandhistorianstryingtounderstandinstitutionsinthepast,andhowtheyaffecteconomicoutcomes.Abigtopicisinequality.FollowingPiketty’s(2013)monumentalstudyonrisinginequalityundercapitalism,therehasbeenalotofresearchoninequalityinhistory.Scheidel(2017)documentedthatsocietiestendtohaverisingtrendsininequalitythatonlygetreversedunderthefourfollowing“horsemen”ofapocalypse:1)massmobilizationwarfare,2)transformativerevolutions,3)statecollapse,4)plagues.KohlerandSmith(2019)puttogetheravolumewherearcheologistsdiscusswhatarethebestwaystomeasureGinicoefficientsofinequalityusingdatafromarcheologicalexcavations.FlanneryandMarcus(2014)provideatourdeforcebydescribingancientsocietiesatdifferentstagesintheirdevelopmentandshowingthroughwhatmechanismsinequalityappearedalongsidewitheconomicdevelopment.3.ComparativecultureManystudieshavelookedatthegeographicalreasonsfortheemergenceofparticularcultures.Thereisawellknownliteratureineconomicsgivinggeographicalreasonsforwhysomecountriesandregionshavemoretrustthanothers(seee.g.BuggleandDurante,2017).Thereisalesswellknownliteratureinbiologyandpsychologylookingatgeographicaldeterminantsofparticularculturalsystems,inparticulardeterminantsoftheemergenceofcollectivistversusindividualistcultures.Onestrandofthelatterliteraturereferstohowdifferentsocietiesrespondedtotheepidemiologicalenvironment.Onesuchtheory,putforwardbyateamofbiologistsandpsychologists(Fincheretal.2008)istheparasitestresstheory,whichstatesthattheepidemiologicalenvironment,andinparticularthetypesofinfectiousdiseasesfacedbysocietiesaffectedsocialbehavior,psychology,andultimatelysocieties'culture.Themainideaisthatsocietiesthatevolvedinanenvironmentrichwithinfectiousdiseasestendedtodevelopsocialnormsthatledthemtobemoreclosedtowardsforeignersandtoimposestrictersocialrulesand,moregenerally,normsthatwouldminimizethespreadofinfectiousdiseases.Inanutshell,theideaisthatcollectivistculturedevelopedasameanstoprotectsocietiesfromthediseaseenvironmenttheywerefacing.Theauthorscollecteddataonhistoricpathogenprevalenceforninepathogensdetrimentaltohumanreproductivefitness

(leishmanias,trypanosomes,malaria,schistosomes,filariae,leprosy,dengue,typhusandtuberculosis)forcountriesthatalsohadanindividualism/collectivismindexfromthewell-knownHofstede(2001)databaseonculture.4Dataonhistoricpathogenprevalencewerebasedonoldatlases,buttheyalsoseparatelycollecteddataoncurrentpathogenprevalence.Theyfoundastrongcorrelation,inparticularbetweenhistoricpathogenprevalenceandmeasuresofcollectivism.Infurtherwork(Thornhilletal.2010),theymakethedistinctionbetweenzoonoticandnon-zoonoticparasiteprevalence.Zoonoticdiseasesarenottransmittedviahumantransmissionwhereasnon-zoonoticdiseasesare.Accordingtotheparasitestresstheory,onlythepre-valenceofnon-zoonoticdiseasesshouldaffectculture.Thisisindeedwhattheyfind,usingtheGIDEONdatabasethatrecordsthepresenceofeveryhumaninfectiousdiseaseacrosstheworld.Otherstudieshaveexaminedtheeffectofdifferencesinthedistributionofparticularvariantsofgenesonculturalevolution.ChiaoandBlizinsky(2010),twoneuroscientistsfoundalinkbetweencollectivismandthefrequencyoftheSalleleoftheserotonintransportergene(5-HTTLPR).Thelatterisassociatedwithincreasednegativeemotion,includingheightenedanxiety,harmavoidance,fearconditioning,attentionalbiastonegativeinformationaswellasincreasedriskfordepressioninthepresenceofenvironmentalriskfactors.Inparticular,exposuretochroniclifestress,suchasinterpersonalconflict,lossorthreat,isconsideredawell-knownriskfactorfordepressioninSallelecarriersofthe5-HTT.IntypicalEastAsiansamples,70-80%ofindividualsareS-carriers,comparedto40-45%inEuropeansamples.EastAsianpopulationsneverthelessreportlessanxietyandmooddisorders,despitetheirhighergeneticpropensity.Thisnegativecorrelationissignificant.TheythushypothesizethatincountrieswithahigherfrequencyoftheS-allele,collectivistvaluesevolvedtoprotectindividualsfromstressfuleventsthatwouldtriggerdepressionandanxiety.TheyindeedfindarobustassociationbetweentheS-alleleandcollectivismasmeasuredbytheHofstedeindexandtheSuhindex.Theystate:“Emphasizingsocialnormsthatincreasesocialharmonyandencouragegivingsocialsupporttoothers,collectivismservesan‘anti-psychopathology’functionbycreatinganecologicalnichethatlowerstheprevalenceofchroniclifestress,protectinggeneticallysusceptibleindividualsfromenvironmentalpathogensknowntotriggernegativeemotionandpsychopathology.Thesefindingscomplementnotionsthatculturalvaluesofindividualismandcollectivismareadaptiveandby-productsofevolution,morebroadly.”AstudyinasimilarspiritisthatbyWayandLiebermannthatfindsapositivecorrelationbetweencollectivismandthefrequencyoftheGalleleinpolymorphism4Theyalsousedothermeasures:i)ameasuredevelopedbySuhetal.(1998)whocombinesHofstede’sindexwithotherindicatorsbyHarryTriandis,apioneerinthecross-psychologystudyofindividualismandcollectivism,ii)ameasuredevelopedbyGelfandetal.(2004)onin-groupcollectivismpracticeswithinorganizations,iii)KashimaandKashima(1998)dataonwhetherlanguagesallowtodropfirstandsecondpersonpronounsinsentences.

A118Gintheµ-opioidreceptorgene,creatingastrongerpsychologicalpainfromsocialexclusion.AsimilarpositivecorrelationcanbefoundbetweencollectivismandthefrequencyofavariantoftheMAOAenzyme(monoamineoxidaseA)thatbreaksdownneurochemicalssuchasserotoninanddopamine.TheMAOA-uVNTRwasalsoassociatedwithgreaterpainfromsocialexclusion.AsintheChiaoandBlizinskystudy,despiteahigherpropensityfordepressionimpliedbythehigherfrequencyofthesevariantsofgenes,theyalsofoundanegativecorrelationbetweenthesegenevariantsandtheoccurrenceofmajordepressioninthepopulation.AfurtherpieceofevidenceisprovidedbyLuoandHan(2014),twopsychologistsfromPekingUniversity,whoshowthataparticularvariantoftheoxytocinreceptorgenepolymorphism(OXTRrs53576),whichhasbeenlinkedtosocialcognitionandbehavior,isrelatedtocollectivism.TheAalleleofOXTRrs53576,whichismorepresentinEastAsianpopulationscomparedtoEuropeanpopulations,isassociatedwithdeficitsinempathy,positiveaffect,emotionalsupport-seeking,self-esteem,maternalsensitivity,pro-socialtemperamentandtrustbehavior,aswellashigherreactivitytostressandpropensitytowardsdepression.Asintheotherstudies,thereisanegativecorrelationwithdepression.Whilesomeofthesestudiesdonothaveaverylargesampleofcountries,theyneverthelessshowaclearpatternbetweenthenaturalenvironmentfacedbycollectivities(frequencyofpathogensandfrequencyofparticularversionsofgenesthatarerelatedtogreaterpropensityofpsychologicalsuffering)andtheevolutionofcultures.Theyindicatethatgenesandculturalvaluescanco-evolveinthespiritofthepioneeringworkofBoydandRicherson(1985)andprovideimportantfoundationsforacomparativeunderstandingofculturalsystems.Whethertheycanbethewholestoryisanothermatter.Certainly,onecanarguethatthereisalsoaco-evolutionbetweencultureandinstitutionsthatmayalsobeimportant.Wenowturntosurveysomeoftherecentresearchoncomparativeinstitutionsinhistory,mostofwhichillustratesthisco-evolution.4.Comparativeinstitutions.Researchineconomicsoncomparativeinstitutionsinhistoryisrelativelyrecent.Aseriesofveryinterestingpapersattempttoexplaindifferencesininstitutionsinantiquity.Weonlyreviewinthisarticlesomeofthemostsalientrecentcontributions.Maysharetal.(2017)examinetheroleofdifferencesintransparencyofagriculturalproductionintheformationofinstitutions.Theirtheorystatesthattransparencyintheconditionsofagriculturalproductionaffectsthegovernment’sabilitytoappropriaterevenuefromthefarmingsector.TheycontrastthecaseofancientEgyptandMesopotamia.AncientEgypthadhightransparencyofagriculturalproduction.TheNilefloodedregularly,bringingnutrientstothefloodedsoilthatthendeliveredcropsofcereals(mostlybarley).TheregularmildfloodingoftheNilewasthusthesourceof

agriculturaloutputthatmadeitpossibletodeveloptheEgyptiancivilizationasearlyassevenmillenniaago.Thereisastrongrelationbetweentheamountoffloodingandthesizeofcrops.So-called“Nilometers”measuringtheextentofthefloodingmadeitpossibletopredictquiteaccuratelythefuturesizeofcrops.AsconditionsofproductionwereveryhomogenousalongtheNile,itwasthusalsopossibletopredictsizesofcropslocallybasedontheamountoffloodingmeasuredindifferentplaces.AccordingtoMaysharetal.,thishelpsexplaintheabsenceofprivatepropertyoflandinEgypt.LandwassaidtobelongtotheEmperor.Peasantswereorderedtodeliveraparticularamountofgraineveryyear,dependingonthepredictionsforthatparticularyear.ThistransparencyassuredahighlevelofrevenuesfortheEgyptiangovernment,andthusastrongstatecapacity.Giventhetransparency,lowerlevelsofgovernmenthadfewinformationaladvantages,whichledtoastrongcentralizationingovernmentpower.Mesopotamia,ontheotherhand,presenteddifferentnaturalconditions.SouthernMesopotamiahadcomplexandvaryingfarmingconditions.Waterwasscarceandhadtoberationedbythelocalelites.AsinEgypt,owner-cultivatedfarmingwasalsorareaswatermanagementassuredhightransparencytolocalelites.ThisinformationaladvantagetolocalelitesalsoexplainedwhySouthernMesopotamiaremaineddecentralized.InNorthernMesopotamia,agriculturewasrainfed,creatinguncertaintyaboutthesizeofcrops,withlittletransparencytolocalelites.Thisrelativeopacityexplainstheprevalenceofprivatefarming,accordingtoMaysharetal.(2017).Theirmodel’sexplanationfortheprevalenceofprivatefarmingisthefollowing:understrongtransparency,thegovernmentcanpayafarmerafixedwage,butdismisshimifhedoesnotdelivertherevenuesdemandedOntheotherhand,withlowtransparency,dismissaldoesnotworkasitmaybebasedonwronginformation.Inthatcase,itisoptimaltoletfarmersownthelandandneverbedismissedfromit,whilepayingtaxestothegovernment.Inanotherpaperco-authoredwithLuigiPascali,Maysharetal.(2015)emphasizetheroleofstorabilityofagriculturalproductsontheemergenceofstatesandagovernmenthierarchy.Theychallengetheconventionalwisdom,accordingtowhichincreasesinagriculturalproductivityledtoasurplusthatfreedresourcestofundagovernmentapparatus.Theyemphasizeinsteadtheroleofappropriability,whichdependsonstorablesurplus.Theycontrastthestrongappropriabilityofgrain,ahighcaloriefoodthatcanbestoredforlongperiodsandtransportedeasily,andcanthusbetaxedbyagovernment,butalsostolenbythieves,whichcreatesdemandforprotection.Incontrast,tubersdonotlastlongwhenstored,andcanthusnotbeappropriated.Allmajorstatesthatemergedinhistoryreliedoncereals.Theygivedifferentpiecesofempiricalevidencetosupporttheirtheory.Notethatthequestionaddressedinthispaperisquitedifferentfromtheotherone.Thequestionhererelatestotheemergenceofstatestructures,i.e.whystatesappearedearlyinsomeareasandnotinothers.Thereisalargeliteratureonthatveryimportantquestion(seee.g.DalBoetal.2015,Carneiro,1970;Turchin,2016;Schönhölzer,2017andothers),butitissomewhatdifferentfromissuesofcomparativeinstitutionsinhistory,whichisthetopicofthispaper.

GreifandTabellini(2017)wroteanimportantpapercomparingtheroleofclansandtheorganizationofcitiesinChinaandinWesternEurope.ClanshavealwaysplayedaveryimportantroleintheorganizationofChinesesociety.Duetotheprevailingpatrilinealkinshipsystem,Chinesepeoplecouldalwaystracetheirancestorsonlythroughthepaternalside.Clanmembershipcouldthusalwayseasilybedefinedbyhavingacommonmaleancestor.ClanshavealwaysbeenparamountsocialorganizationsinChina,andurbanconcentrationsweremainlyclansettlements.Nonclanmemberswereallowedtoliveinurbanclansettlements,butalwaysatthemargin.Incontrast,clansneverplayedamajorroleinEurope.Moreover,urbanconcentrationswerenotatallbasedonclanmembership,butwerebasedonthenotionofcitizenship,implyingrightsanddutiesoftheindividual.Europeancitiescanbeseenasplaceswhereindividuals,regardlessoftheirancestryandfamilyconnections,sharecommoninterestsinprovidingpublicgoods.Europeancitieswereonlyoneformofcorporation,amodeoforganizationbasedontheparticipationofindividualswithlegallydefinedrightsandresponsibilities.Citieswereindeedincorporatedbyalegalcharter.EuropeanindividualismwaspropagatedbytheCatholicChurch,inparticularwiththenotionsofindividualsalvationofthesoulanduniversalmoralvalues,“generalizedmorality”.Incontrast,inChina,collectivistvaluesspread,mainlyviaConfucianismthatemphasizedethicalnormsbasedonkinshipandplacewithinthefamilyandtheclan.InChina,largemigrationsmostoftenoccurredwithintheclanstructure,withwholeclansmoving,whereasinEurope,migrationsweremostlyindividual,basedonthenuclearfamily,possiblyinitssomewhatextendedform.Welackthespacetodwellfurtheronthisquitethoroughandinsightfulcomparativeanalysis.TheroleofreligiononcomparativedevelopmenthasbeenstudiedbyGrigoriadis(2019).HefocusesmoreonEasternandWesternEuropeaswellastheMediterranean.Amongothers,heanalyzesdifferencesbetweentheinstitutionaleffectsofProtestantism,Judaism,Catholicism,OrthodoxChristianityandIslaminincreasingorderofcollectivism.Heanalyzesinvariouschapterstheeffectofdifferentreligionsonpoliticalregimesandtheorganizationofgovernment.Whilemuchofhisanalysisisatagranularlevelofcomparison,andbasedpartlyonlabexperiments,hefindsthatmorecollectivistreligionsareassociatedwithmorecentralized,lessdemocraticregimesandlessrepresentativeness,withdemocracyconfinedmoretothelocallevel.Theyprovidepublicgoodsbasedonpaternalisticexpostwelfareguaranteesinsteadofcontractualpublicgoodsinmoreindividualistreligiousenvironments.Morecollectivistcountrieshavemoreaccountabilityoflocalbureaucratstothecentralgovernmentratherthanthepeople.Valuesofsolidarity,obedienceanduniversaldisciplinepermeatetheorganizationofthestateinsocietieswherereligionismorecollectivist.AcemogluandRobinson(2019)havedevelopedacomparativetheoryabouttheemergenceofstates.Theyfindthatinhistorythreetypesofstatesemerged:1)stateswithverylittlecapacitythatcannotimposeorderandaretooweaktoarbitrateconflictsbetweengroupsofsubjectsonitsterritory2)despoticstatesthat

dominatecivilsocietyanddonotletitdevelop3)anintermediatecasewherecivilsocietyplaysanimportantroleandwherethestateisnotstrongenoughtomuzzlecivilsocietybutstillstrongenoughtocreatetheruleoflaw.Inthelattercaserepresentinginclusivestates,acompetitionevolvesbetweenastrongcivilsocietyandthestateapparatusWhichoneofthosethreesystemsemergesdependsona“narrowcorridor”intermsoftherelativepowerofthestateandcivilsociety.Ifthestateisinitiallystrongenoughthatitcanmuzzlecivilsociety,thenthestatecanbecomeevermoredespoticovertime.Ifinstead,itisinitiallytooweakrelativetocivilsociety,thenitleavesaspacetovariousfactionsincivilsocietythatmakeitimpossibletobuildsufficientstatecapacity.ItisnoteasytofitanalysesbyGreifandTabellini(2017)orMeyshavetal.(2017)inthisframework,anditappearssomewhatsimplisticrelativetotheseothertypesofcomparativeanalysis.5.Acomprehensivedatabaseonhistoricalinstitutions.InowreportonrecentworkIdidtogatherdataoninstitutionsinantiquity.Mymotivationstemmedmostlyfrommyinterestontheeffectsofcultureonlongrungrowth(GorodnichenkoandRoland,2011,2017)andonpoliticalinstitutions(GorodnichenkoandRoland,2015).Ithoughtthehistoricalexplanationsfortheemergenceofcollectivismversusindividualism(e.g.thosereviewedaboveinsection3),whilequiteconvincingandinterestingonlygaveapartialviewofthepossibleexplanationsforthehistoricalemergenceofcollectivistversusindividualistculture.InlinewithrecentworkbyBisinandVerdier(2017),Ithoughtitmorefruitfultolookatthecoevolutionofcultureandinstitutions.Indeed,itisreasonabletohypothesizethatparticularearlyinstitutionsmayhaveaffectedculturalvaluesandbeliefs,whichhasinturnhelpedconsolidateboththeseinstitutionsandtheunderlyingculture.GiventheinertiaofculturepredictedbytheBisin-Verdiermodel(seealsoRoland,2004),institutionsmayhaveaffectedculturalvaluesandbeliefsthatarestillpresentintoday’sworld.ReadingTrigger(2003),Iwasstronglyencouragedbyhiscomparativefindingsonsevenimportantancientcivilizationsshowingconsiderablevariationinmanyinstitutions.Inthespiritofearlierworkonlegalinstitutions(LaPortaetal.,1998)Ilaunchedintoaverytime-consumingcollectionofdataoninstitutionsandinstitution-relatedvariablesinantiquityfor92countries5(countriesforwhichwehaveascoreontheindividualism-collectivismculturalcleavage).Withthehelpofresearchassistants,datawerecollectedonanumberofvariableslistedinTable1.AdetaileddescriptionofthedefinitionofthosevariablesaswellasthescoringrulesusedcanbefoundinRoland(2018).Itisneverthelessusefultosayafewwordsaboutthesevariables.Table1includesvariablescapturinginstitutionalcharacteristics,groupedintolegal,politicalandsociologicalinstitutions.ThesevariablesandtheirscoresaredescribedfurtherinAppendix1.EconomicandGeographicalvariableswerealsocollected,andarepresentedinmoredetailedinsection5.2and5.3respectively.5Forafulllistofcountriesincludingthetimeperiodcoveredandthesocietiesinvestigated,seeTable1inRoland(2018).

TABLE1:COMPARATIVEECONOMICHISTORYPROJECTLegalinstitutions-StrengthofPrivatepropertyofland-Indexofimportanceofprivatepropertyofslavery(4variables)-Horizontalversusverticallawcompositeindex(3variables)Politicalinstitutions-city-stateversusterritorialstate-centralizationofgovernment(twovariables)-importanceofcities(twovariables)Sociologicalinstitutions-importanceofmerchantsinsocieties-bilinealversusunilinealkinshipofsystem-strengthofclaninsociety(5variables)-socialstratification-ethnicdiversityEconomicvariables-intensityofprivatetradewithinthepolity(domestictrade)-intensityofprivatetradeacrosspolities(internationaltrade)-EaseoftransportationGeographicalvariables-heterogeneityinconditionsofproduction-distancetoahottradingzoneoutsidethecountry-easinessoftaxation-easinessofconquest-soilfractionalizationOurstartingpointisthattherewasaverylargedifferenceininstitutionsinAntiquity.Asmentionedalreadyabove,somecountrieslikeancientEgypt,ancientChinaandPerufunctionedmorelikecentrallyplannedeconomies.Privatepropertyoflandwasmostlynon-existentandthelandbelongedtotheEmperor.Thesamecanbesaidofprivatepropertyofslaves.Householdscouldnotbuyandsellslaves,andtheexistingslaveswerethepropertyofthegovernment.6ThisstandsinstarkcontrasttomarketeconomiessuchasinancientGreeceorancientRomewhereprivatepropertyoflandandslavesplayedanimportantrole.Therewerealsomarkeddifferencesbetweenthelegalsystems.InChina,butalsoinEgypt,andothercountries,thenatureofthelegalsystemcanbestbecharacterizedbyChina's"legalist"doctrine,whichisstillfullyaliveinChina'scommunistregime.Theessenceofthelegalistdoctrineisthatthelawmustbeusedasatoolofoppression6Contrarytoreceivedwisdom,theEgyptianpyramidswerenotbuiltbyslavesbutbygangsofworkers.

ofsubjectsbythegovernmentapparatus.Inparticular,itspecifiespunishmentsforviolationsofprohibitions,inparticularrelativetobehaviorwithrespecttogovernmentofficialsorgovernmentproperty.Inthatsense,itcanbeseenasregulating"verticalrelations"betweenthestateapparatusandthepopulation.Itcanbecharacterizedas"rulebylaw".Thisstandsinstarkcontrastto"ruleoflaw",wherethelawisestablished,aswasthecaseforexampleinancientGreeceandancientRometorule"horizontalconflicts"betweencitizens,inparticular,conflictsoverpropertyorcontractenforcement.Intheformercase,thelawisthereasaninstrumentofoppression,inthelattercase,itexiststoprotectprivatepropertyandprivateinterests.Notsurprisingly,inthosecountrieswheretherewasnoprivatepropertyoverlandandslaves,theorganizationofproductionandtheallocationofresourcesweredoneviathestateapparatus,notviathemarket.Maysharetal.(2017)alreadyemphasizethisintheircomparisonbetweenancientEgyptandAncientMesopotamia.Itisthereforejustifiedtosaythatsomecountrieshadastatistinstitutionalsystem,whereasothershadamarketinstitutionalsystem.Wedidnotwanttosatisfyourselvessimplywithanarrativeoftheinstitutionaldifferencesbetweenvariousstatesinantiquity,butwantedtocollectdatatoseewhatkindofpatternswouldemergeinthedistributionsofdataacrosscountries,butalsointhecorrelationsbetweenvariables.ThetitleofsomeofthevariableslistedinTable1ismostlyself-explanatory(werefertoRoland,2018foranexplanationoftheexactscores),butitisworthwhilegivingsomeexplanationswithrespecttoindicatorsbuiltonthesumofdifferentvariables.Ourindexontheimportanceofprivateslaveryisbasedonfoursub-variables:1)theprevalenceofprivateslavery,i.e.theimportanceofprivateslaveryamongtheslavepopulation,2)theexistenceandextentoflegalnormsforprivateslavery,3)thepresenceofslavetradeandslavemarkets,4)theimportanceofprivateslavesinthetotalpopulation.Ourindexfor"horizontallaw"orruleoflawisbasedon1)theextentofpropertylaw,2)theextentofcontractlaw,3)theextentofprocedurallawinpubliclaw.Ourindexofgovernmentcentralizationcoverstwovariables:1)theextentofcentralizationofgovernmentbetweenthecenterandlocalgovernment,2)theextentofconcentrationofpowerinthehandsoftheexecutive.Ourindexontheimportanceofcitiesisbasedontwovariables:1)thedegreeofurbanization,2)theimportanceofcommercialcitiesrelativetoadministrativecities.Finally,thestrengthofclanismeasuredbyfivesub-variables:1)extentoffamilysize(fromnucleartoextendedfamily),2)theimportanceofunilinealkinshipinsociety,3)degreeofgeographicalconcentrationofdescentgroup,4)degreeofcooperationwithinthedescentgroup,5)powerofclanstructureinconflictresolutionwithindescentgroup.5.1.Arethereinstitutionalclusters?Wenowpresentsomefiguresshowingthedistributionofsomeoftheinstitutionalvariableswecollected.Wecomputedsyntheticindicestorepresentlegal,politicalandsocialinstitutions.AsshowninTable1,ourfirstindex,isasyntheticlegal

indicator,presentedinFigure1,andisbasedonanaverageofscoresforprivatelandownership,ownershipofslavesandourhorizontallawcompositeindex.Asonecansee,thedistributionisquitebimodal.Justtogiveanidea,thelowestscores(below2)areforChina,Egypt,Fiji,Ghana,Namibia,Nepal,SierraLeoneandthehighestscores(above9)areforancientGreeceandRome,Anglo-saxonandScandinaviancountries,BelgiumandSpain.

Figure1:Syntheticlegalsystemindicator.

Therewerethuspresumablytwoclustersofcountries:afirstgroupwithnoorlittleprivatepropertyoflandandslavesandalegalsystemfocusedonimposingthepowerofthestateonunfreesubjects,andasecondgroupwithprivatepropertyoflandandslaves,andalegalsystemfocusedonprotectingthesepropertyrights.Weshouldexpectthefirstgrouptohavehadveryautocraticinstitutions.Inthatsense,thereshouldbestrongcomplementaritybetweenlegalandpoliticalinstitutionsinearlystates.Wedonothavegoodmeasuresofhowautocratictheywere,butitisusefultolookatasyntheticindexofpoliticalinstitutions,thatisanaverageofgovernmentdecentralization(includinglackofconcentrationofexecutivepowers),whethercountrieswherecitystatesorterritorialstatesandtheimportanceofcities(includingwhetherbigcitieswerecommercialratherthanadministrativecenters).ThedistributionofthissyntheticpoliticalindexispresentedinFigure2.

0.05

.1.15

.2Density

0 2 4 6 8 10privatelaw

Aswecansee,thisindicatorisalsoquitebimodal.Amongcountrieswiththelowestscores,wehaveChina,Bhutan,Chile,Japan,KoreaandNepal.Amongcountrieswithahighscore,wehaveGreece,Italy,Belgium,Netherlands,Malaysia,NigeriaandUnitedArabEmirates.NotethatAnglo-saxonandScandinaviancountriesdonothaveahighscoreonthissyntheticpoliticalinstitutionsindex,becausetheyhadterritorialstates,albeitwithchecksontheexecutive,andnotcity-states.Animportantinstitutionwastheassemblyoffreecitizens(althing,althung,thingindifferentScandinavianorGermaniclanguages)thatmetatleastannuallytosettlejudicialconflictsbetweenfreecitizens,butalsotomakeimportantpoliticaldecisions.Thekingcouldnotmakeimportantdecisionswithoutthesupportofthatassembly.ThispresenceofterritorialstatesamongtheseEuropeancountriesisalsothereasonwhythedistributionofourpoliticalindexisskewedtotheright.This"Anglo-viking"exceptionalismisquiteinteresting,andworthoffurtherresearch,especiallysinceTrigger(2003)consideredthatthedifferencebetweencity-statesandterritorialstateswasafundamentalone.Thisexceptionalismissomethingoneneedstobeawareof,especiallygiventheoften"Anglo-centric"natureofalotofhistoricalresearch.Figure2:Syntheticpoliticalinstitutionsindex.

Finally,webuiltasyntheticsociologicalindexcomposedof1)theroleormerchantsinsociety,2)theweaknessoftheclansystem(theoppositeofthestrengthofclanindicator),3)bilinealinsteadofunilinealkinshipsystem,4)socialstratificationand5)ethnicdiversity.Aswecanseebelow,thisindicatorisonlyweaklybimodalwith

0.0

5.1

.15

.2D

ensi

ty

0 2 4 6 8 10Synthetic index of political institutions

modesaround5and7.Inparticular,thesocialstratificationvariable(notshownhere)ismoreorlessnormallydistributed.Overall,therearegoodreasonstoconsiderthatthereweretwomainclustersofinstitutions,especiallyconsideringthedistributionoflegalinstitutions,whichisthenotonlythemoststriking,butalsothemostemblematicoftheseinstitutionaldifferences.Figure3:syntheticsociologicalindex.

5.2.LinksbetweeninstitutionsandmarketsAfterhavinggivenanoverviewofthedistributionofinstitutionalvariableswecollected,thepresumptionisthatthereshouldbealinkbetweeninstitutionsandmarketdevelopment.Weshouldexpectmarketdevelopmenttobestrongincountrieshavingwhatwehavelabeledas“marketinstitutions”andweakerincountrieshavingstatistinstitutions.Thisisindeedwhatwefind.Obviously,wedonothaveprecisemeasuresformarketdevelopment,butwecollecteddataontheintensityofprivatetradewithinpolitiesaswellasacrosspolities.Herearethescoringrules.Scorefortradewithinapolity

0.1

.2.3

.4D

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0 2 4 6 8Synthetic sociological institutional index

1-2:Noprivatetrade.Mainlydistributionviathestateapparatus.Somebarter.3-4:Verylimitedprivatetrade.Distributioneconomyandsubsistenceproduction.5-6:Tradelimitedinscope(goodstraded),locationandtime.7-8:Activetradewithsomelimitsandsignificantnonmarketactivity.9-10:Intensiveinternaltradeanimportantengineoftheeconomy,possiblyinconjunctionwithintensiveinternationaltrade.Scoresfortradeacrosspolities:1-2:Mostlyautarkyorforeigntradeconductedonlybygovernmentemissaries.3-4:Foreigntradecontrolledbythegovernment,usingsomeprivatemerchants.5-6:Substantialprivateforeigntradebutoveralllimitedrelativetothesizeoftheeconomy.Significanttradebarriersandcontraband.7-8:Largeforeigntradewithtradebarriersbutquitewidespreadsmuggling9-10:Intensiveinternationaltradeconductedbyprivatemerchantsplayingakeyrolefortheeconomy.Notethatthedistributionofthosevariablesisalsoquitebi-modal(seeRoland,2018).CountrieswithlowscoresfordomestictradeareChinaandancientEgypt,manyAsiancountries(Bhutan,Nepal,Korea,Japan)aswellassomecountriesfromAfricaandLatinAmerica.Amongcountrieswiththehighestscores,wehavetheusual(ancientGreeceandRome,NorthernEuropeancountries),butalsoSlovenia,MoroccoandLibya,SaudiArabia,Indonesia,MalaysiaandPakistan,UruguayandMexico.Scoresforinternationaltradearedistributedquitesimilarly.Figure4showsaregressionwherewecreateacombinedinstitutionalindex,averagingourlegal,politicalandsociologicalinstitutions,andregresstheintensityofprivatedomestictradeonthatindex.Aswecansee,itispositiveandhighlysignificant.Figure4:Institutionsinantiquityandintensityofdomesticprivatetrade.

InFigure5,wedothesamethingfortheintensityofprivatetradeininternationaltrade,andweseeasimilarresult.Figure5.Institutionsinantiquityandintensityofprivateinternationaltrade.

02

46

810

0 2 4 6 8Institutions in the antiquity

95% CI Fitted valuesTrade within the polity

05

10

0 2 4 6 8Institutions in the antiquity

95% CI Fitted valuesTrade across polities

Thisclearlydemonstratesthatthereisastrongcorrelationbetweeninstitutionsinantiquityandmarketdevelopmentatthetime.Statistsystemshadlessmarketdevelopmentwhilemarketsystemshadmoremarketdevelopment.Thisshouldobviouslynotcomeasasurprise,buttheresultfurtherunderlinestheclusterswehaveidentified,andshowsaclearcomplementaritybetweeninstitutionsandtheextentoftheuseofthestateorthemarketasthemainmeansofallocationofresources.Thisofcourseraisesthequestionofcausality:wereinstitutionsthecauseformarketdevelopment,orwasitinsteadmarketdevelopmentthatcreatedademandforinstitutionsprotectingprivateproperty?Wearenotinapositiontoanswerthatquestion.Itisalsonotclearthatthatquestionisacrucialone,astheremayhavebeenaco-evolutionbetweenboth:betterinstitutionsfosteredprivatetradewhichinturnledtomoredemandforinstitutionsprotectingpropertyrights,andsoforth.Inanycase,thecomplementaritiesevolvedandpossiblyledtoinstitutionaldivergencethatisquiteclearinthedata.5.3.Whatexplainsthedifferencesinsystems?Thequestionthenraisediswhyweseethesedifferences,andwhatcouldhavetriggeredadynamicofdivergencebetweenmarketandstatistsystems.Quitepossibly,theanswercanbefoundindifferencesingeographicalconditions.InTable2,weregressthecombinedsyntheticinstitutionalindexonanumberofgeographicalvariables.

Thefirstvariableisameasureofheterogeneityinconditionsofproduction.Itmeasurestheextenttowhichconditionsofproductiondifferedindifferentpartsoftheterritory.Hereisthescoringrule:Heterogeneityinconditionsofproduction.1-2:Veryhomogeneousgeographicalenvironment,oneoronlyafewkindsofresources.Typically,barrenlandduetoclimateorothergeographicalconstraints;alluvialplainonlyforgrainproduction;plantationeconomy3-4:Afewkindsofresources/products,somedifferencesofenvironmentacrossthegeographicalsurroundings.5-7:Somediversityofnotableresources,adifferentiatedenvironmentacrossthegeographicalsurroundingsandclosenesstoplaceswithdifferentresources.8-10:Verydiversegeographicalenvironment,manykindsofresources.Typically,vibrantinterregionaltradeofnaturalresourcesThehypothesisisthatstrongheterogeneityofproductionwouldfavortradeinsidethepolity,andthusthedevelopmentofinstitutionsprotectingprivatepropertyandtrade.Ifinstead,conditionsofproductionwerehomogenous,therewouldbelessadvantagestotradeacrossspace,butinsteadmoreadvantagestocentralizedallocationofresourcesbythegovernment,possiblytotakeadvantageeconomiesofscale.Soilfractionalizationisanotherindicatorofheterogeneityofconditionsofproduction.Itisbasedondataonthemaximalpotentialproductioncapacityint/haoverseventeencropsfromtheFAO’sGlobalAgro-ecologicalZones(GAEZ)database,scaledbyhistoricalcaloriespertonforeachcropbytheFAO.

Easeoftransportationisbasedonthefollowingscoringrule:1:noaccesstowatertransportation(lakes,riversorsea);landtransportationhastoovercomesignificantnaturalbarriers(jungles,swampsorhighmountains)typicallylackedbeastsofburdenandwheeledcarts2:lackednavigablerivers,landtransportationencounterssignificantnaturalbarriers(jungles,swamps,highmountains)3:lackedwatertransportation,landhassomenaturalbarriersthatblockcommunication4-5:lackedrivertransportation,butlandroutesarewell-maintainedanddonotencountermuchnaturalbarriers6:Moderaterivertransportation,landtransportationhassomebarriers(hills,trails,forests,deserts)7:Moderaterivertransportation,easylandtransportation.(well-maintainedroadsorplains)8:fairlyeasymaritimeand/orrivertransportation,difficultlandtransportation(e.g.jungles,mountains,bogs)9:easymaritimeand/orriverinetransportation,moderatedifficultyoflandtransportation(e.g.forests,deserts,hills,trails)10:easymaritimeand/orriverinetransportation;easylandtransportation(roadsystems;plains,etc)Distancetoahottradingzoneisbasedonthenumberofkmfromthecapitalofacountryatthetimeofthemeasurementandtheclosesthottradingzonewheremerchantsusedtogathertotradegoods.Distancetotheseaistheclosestdistancetotheseafromthecapitalofthecountryatthetimeofthemeasurement(seeRoland,2018fordetails).Ruggednessisfor100kmdistances(seeNunnandPuga,2012forhowtomeasureruggedness).Theheterogeneityscoreandsoilfractionalizationaremeasuresofthepotentialbenefitsfromtradeinsideacountrywhereastheothermeasures(easinessoftransportation,distancetothesea,distancetoahottradingzoneandruggedness)aremeasuresofthecostoftransport.Thelatterwouldaffectthebenefitfromtradeaslowcostsoftransportwouldmakeitpossibletotradeatalowercost.AswecanseefromTable2,thevariablesallhavetherightsignandareallsignificant,exceptforruggedness.Thisdoesindicatethatthereisacorrelationbetweengeographicalvariablesmeasuringpotentialbenefitsfromtradeandmarketinstitutions.Thislikelyindicatesacausaleffectbecausegeographicalconditionsdonotchangeverymuch.5.4.Comparativeeconomichistoryanditsrelevanceforthemodernworld.Whydotheseinstitutionaldifferencesfromantiquitymatter?Ithinktheydoforthefollowingreason.Asstatedabove,iftherehasbeencoevolutionofinstitutionsand

cultureinhistory,differencesininstitutionsfromantiquitymayhaveaffectedculturaldifferencesovertime.Today'smainculturaldifferencesaccordingtocross-culturalpsychologistsisbetweenindividualismandcollectivism(seee.g.Heine,2007).ThedifferencebetweenindividualistandcollectivistcultureisexplainedindetailinGorodnichenkoandRoland(2012).ThemostcommondatabasemeasuringtheseculturaldifferencescomesfromHofstede(2001).Theseculturaldifferencesmattertounderstandthedeterminantsofgrowthandinnovation(GorodnichenkoandRoland,2011,2017),thelikelihoodofadoptingdemocracy(GorodnichenkoandRoland,2015)ordifferencesintheorganizationofmultinationalfirms(Miroshnik,2002;Gorodnichenkoetal.,2015).Morebroadly,tensionsbetweenChinaandtheWestareplayingacentralroleintoday'sworld.Chinahasdevelopedacollectivistcultureinitsmillennialhistory.ThisculturehasshapedChina'sinstitutions,andonecanarguethatcollectivistcultureplaysacentralroleinChinatoday.Understandingtheseculturaldifferencesandtheeffectstheyhaveonthemodernworldarethusofcrucialimportance.Iftoday'sculturaldifferencesdatebacktotheancientpast,onecannotexpecttoday'simportantculturalsystemstochangeanytimesoon.Wehavenootherchoicethantotrytolearntolivepeacefully,takingaccountthesedifferencesandunderstandingtheroletheyplay.InFigure6,weshowtheresultofaregressionbetweenourcompositeinstitutionalindexandHofstede'sindividualismscore.Weseeasignificantlypositiverelation.Thisthusindicatesalikelyeffectofinstitutionsintheancientpastandmodernculture.Wearenotinapositiontoidentifytheexactchannelsthroughwhichpastinstitutionsaffectedmodernculture,butFigure6isconsistentwiththeBisin-Verdiertheoryofco-evolutionofinstitutionsandculture.WealsoshowinTable3reducedformregressionsofHofstede'sindividualismscorewithrespecttogeographicalconditionsthatfacilitatedtheemergenceofmarketinstitutions.Theyhavetheexpectedsignandareallsignificant,exceptforthemeasureofheterogeneityofproduction.Itwouldbedifficulttoarguethatthesegeographicalvariablesaffectedindividualismdirectly.Mostlikely,theywouldbemediatedviathejointdevelopmentofmarkettradeandmarketinstitutions.Thedevelopmentofprivatetradeandprotectionofprivatepropertylikelyfosteredthedevelopmentofvaluesofindividualismwhereasembeddednessinstatistinstitutionslikelyencouragedthedevelopmentofcollectivistvalues.Thesereducedformregressionsthusconferplausibilitytotheideathatparticulargeographicalconditionsaffectedinstitutionalsystemsinantiquityaswellastheintensityofprivatetradeintheancientpast.

Figure6:Individualisminthemodernworldandinstitutionsinantiquity.

6.ConclusionInthischapter,wehavearguedthatcomparativeeconomichistorymaybeafruitfulavenuetodoresearchincomparativeeconomicanalysis.Wereviewedresearchoncomparativearcheologydocumentingpatternsininstitutionaldifferencesobservedinearlystates.Wereviewedtheliteratureonthehistoricaloriginsofculturaldifferences,basedonpathogenprevalenceandsocialadaptationstodifferencesinthefrequencyofparticularvariantsofgenes.Wealsoreviewedsomerecentworkoncomparativeinstitutionalanalysisinancienthistory.Finally,wepresentedresearchbasedonintensivedatacollectiononinstitutionsinantiquityforcloseto100countries.Wedofindinstitutionalclustersthatconfirmthatsomeancientsocietieshadstatistsystems,systemsakintocentrallyplannedeconomiesthatexistedforafewdecadesinthetwentiethcentury.Wealsofindthatstatistversusmarketsystemsinantiquityarestronglycorrelatedwithmoderncollectivistversusindividualistculturalsystems.Reviewingthematerialdiscussedinthischapter,questionsareraisedabouthowtoevaluatethedifferencesbetweenstatistandmarketsystemsinthepast,insomemeasurabledimensions.Onemeasuremightbeeconomicperformance.Thisisoftendonebypopulationgrowth.Anothermightbestability.EgyptianandChinesecivilizations,whichareprimeexamplesofstatistsystems,lastedformillenniaandwerearguablyverystable.Egyptiancivilization,arguablythelongestinhumanhistory,neverthelessdisappearedandneverrecoveredfromtheRomanconquestandsubsequentdominationbyCopts,andlaterMuslims.Itseemsalsothatstatistsystemscouldhavebeenlessterritoriallyexpansionist.Arguably,therearemanyotheraspectsofperformancethatcouldbecomparedwithmoredatacollectionandanalysis.Iwouldcertainlyinanycaseurgenottomaketoomanycomparisonbetweencommunistsystemsinthetwentiethcenturyandstatistsystemsinantiquity.Asdevastatingastheyhavebeenonthelivesofhundredsofmillions,communistsystemsonlylastedafewdecades,notmuchinhistoricalperspective.Theanalysisofstatistsystemsmay,however,befruitfulinunderstandingbetterthecurrentinstitutionalsysteminChina,asitemergedafterthelaunchofeconomicreformsin1978.ThatsystemhasalreadylastedlongerthanMao'scommunistsystemthatlastednotmorethanthirtyyears.ThecurrentChineseinstitutionalsystemmaystilllastformanymoredecades.

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APPENDIX1.SCORINGRULESFOROURINSTITUTIONALVARIABLES(NUMBERSINDICATETHESCORE).

1.LEGALINSTITUTIONS.LandOwnership1:Noevidenceofprivateownership,alllandpropertybelongstothestateortheruler.2:Noevidenceofprivateownershipinsociety,stateownershipandinstitutionalownership.3:Noevidenceofprivateownership,communalownershipdominates.Landexchangeisverylimited(mayonlyexistbetweentribes,villagesorcommunitiesunderveryspecificconditions)4:Privateownershipislimited,andcoexistswithcommunalorinstitutionalownership.Landisinheritablewithinthefamily.Landtransactionisrare.5:Privateownershipcoexistswithcommunalorinstitutionalownership.Landisconditionallyinheritable.Landtransaction(leasing,purchaseandsale)ispresentbutconditional,limitedorrestricted.6:Privatelandownershipdominates.Landisconditionallyinheritable.Landtransactionisveryrare.7:Privatelandownershipdominates.Landisinheritable.Landtransactionisrare.8:Mostlyprivatelandownershipbyindividual.Landisinheritable.Someevidenceoflandtransaction(leasing,purchaseandsale)9:Mostlyprivatelandownershipbyindividual.Landcanbeinherited,rent,orsoldanddisposedattheowner’sownwill.Landtransactioniscommon.10:Mostlyprivatelandownershipbyindividual.Landcanbeinherited,rent,orsoldanddisposedattheowner’sownwill.Landtransactionisverycommonandlandmarketexists.PrivateslaveryFoursubvariablesA)prevalenceofprivateslaveryB)legalorsocialnormofslaveryC)PresenceofSlavetradeandslavemarketD)(private)slavepopulationA:Prevalenceofprivateslavery:1:Almostallunfreelaborsareownedaspublicslavesworkingfortheruler,thestateorpublicinstitutions(temples,armies,etc.);noprivateslavery2:Mostunfreelaborsarepublicslaves3:Privateslavesandothertypesofunfreedependentlaborsuchasserfscoexist4:Mostunfreelaborareprivateslaves5:PredominantmostunfreelaborsareownedasprivateslavesB:Legalorsocialnormofslavery:1:Slavesarenotrecognizedaspropertybutusuallybeingregardedasservantsordependentsoftheruler.Slavescannotbemortgaged,boughtorsold;ornoslaves

2:Slavesarenotdefinedaspropertybutusuallybeingregardedasservantsordependentsoftherulerormaster.Slavescanrarelybetransferredormortgagedunderspecialconditions3:Slavesarenotdefinedaspropertybutretaincertainrightsasperson.Slavesareboundedtolandorclansandgenerallycannotbebought,mortgagedorsoldconditionally(debtbondage,limitedserviceslavery,etc.)4:Slavesarenotdefinedasfullprivatepropertybutonlypartiallyorconditionallyortheyretaincertainrightsasperson.Slavescanbemortgaged,boughtorsold5:Slavesaredefinedinlaworcustomasfullprivateproperty,andtheycanbemortgaged,boughtorsoldattheowner’swillC:PresenceofSlavetradeandslavemarket:1:absenceornearabsenceofslavemarketorslavetrade2:slavemarketsandslavetradeexistsbutlimitedinscale3:slavemarketandslavetradeexist4:activeslavetradeandslavemarket;largenumberofslavesaretraded.5:veryactiveprivateslavetradeandprivateslavemarket;verylargenumberofslavestradedinmarketsD:Privateslavepopulation1:No(private)slavepopulation2:Privateslavesconstituteaverysmallportionoftotalpopulation3:Privateslavesconstituteaportionoftotalpopulation4:Privateslavesconstitutealargeportionoftotalpopulation5:PrivateslavesconstituteaverylargeportionoftotalpopulationCompositeLawIndexSumofthreevariables:propertylaw,contractlawandformalpubliclaw.A.Propertylaw0:Nomentionofprivatepropertynoritsprotectionornoconceptofprivateproperty.Strongemphasisagainsttransgressionagainststateproperty.1:Nomentionofprivatepropertynoritsprotection,ornoconceptofprivateproperty2:Noexplicitmentionofprotectionofprivateproperty,butwrittencodesontransferofproperty,inheritanceofpropertyofindividualsandhowtosolvedisputesonproperty.3:writtencodesontransferofproperty,inheritanceofpropertyofindividualsandhowtosolvedisputesonpropertyandthelawalsoexplicitlymentionsprotectionofprivatepropertyagainstpotentialexpropriation.B.Contractlaw0:nomentionofcontractinlaws

(theexistenceofCommercialLawusuallysuggestscontractlaw)1:unwrittenorcustomarylawthathascasesrelatedtocontract2:writtencontractlawmentioningcasesofcontractandenforcement3:writtencontractlawthathasdetailedconditionsonregulationandenforcementofcontractC.ComparisononPubliclaw0:Noprocedurallaw,usuallynospecificprocedureisfollowed1:Procedurebutlittleprotection2:Someformalizedwayofprocedure4:WrittenprocedurallawNote.Customarylaw=0or12.POLITICALINSTITUTIONSGovernmentcentralizationSumoftwovariables(concentrationofpoweranddegreeofcentralization)Concentrationofpowerinexecutiveinthecentralgovernment1-51:Theruler’sexecutivepowerisgreatlylimitedbylegislatureandjudiciaryinstitutions.Therulerissubjecttochangesmadebyelectionsorassemblydisapproval.2:therulerhaslargepowerintheexecutiverealmbutislimitedinothers.3:Therulerhaslargepowerinlegislature,executiveandjudiciaryrealmsbuthispowerconstrainedbyotherorganizationsorinstitutions(termlimits,assemblyconsent,legalconstraintsetc.)4:Therulerhaslargepowerinlegislature,executiveandjudiciaryrealmsbuthispowerispotentiallyconstrained.5:Therulerhasunlimitedpowerinlegislature,executiveandjudiciaryrealms.Therulergenerallyrulesforlife.Relationshipbetweencentralandlocalgovernment1-51:decentralized.Thelocalgovernmentisindependentfromthecenter.Thecentralgovernmenthasnopowerinappointinglocalofficialsorinterveninglocaladministration.2:decentralized.Thelocalgovernmentisdefactoautonomousfromthecenter.Thecentralgovernmenthaslimitedpowerinappointinglocalofficialsorinterveninglocaladministration.3:centralizeddelegationalsystem.Thelocalgovernmentisadministeredbyhereditarylocalrulers,andthecentralgovernmentcannotreplacelocalofficialsatwill.Noseparationofdifferentaspectsoflocaladministration.4:centralizedbureaucracy.Thelocalgovernmentisdirectlyappointedbyandresponsibletothecentralgovernment.Theseparationofpowersandregulartransferoflocalofficialsarenotinstitutionalizedornotexecuted

5:centralizedbureaucracy.Thelocalgovernmentisadministeredbyseparateofficialswhoaredirectlyappointedbyandresponsibletothecentralgovernment.Localofficialscannotappointlower-levelofficialsatwill,andtheyaretransferredatregularintervals*Atotalscoreof1ifnopoliticalauthoritybeyondcommunity(e.g.,autonomousbandsandvillages)ImportanceofcitiesUrbanizationrate:0:completelyrural1:thepolityhasonlyafewsettlements/towns,citiesintherealsensedonotexist;lowurbanpopulation.==0%2:thepolityhasafewtownsorlargesettlements;relativelylowurbanpopulation.<5%3:thepolityhasanumberoftownsorcities,medium-levelurbanpopulation.5%-10%4:thepolityhasanotablenumberoftownsandcities;urbanpopulationisrelativelyhigh.10%-15%5:thepolityishighlyurbanized.Populationisconcentratedinurbancentersandveryhigh.>15%CommercialFunctionofcities:1:almostallcitiesareadministrative/ceremonial/militarycenters;citiesarenotcommercialcenters2:citiesmostlyareadministrative/ceremonial/militarycenters;somecommercialfunction3:citiescombinedthefunctionofadministrationandcommerce4:citiesareprimarilycommercialandmanufacturingcenters5:citiesarecommercialandmanufacturingcenters3.SOCIOLOGICALINSTITUTIONSImportanceofClanScoresarebasedonthesumofscoresofthefollowing5variables.A:familytype(nuclearfamilyvsextendedfamily)(2)0:nuclearfamilyisthemostcommonfamilytype1:mixed(stemfamiliesormixednuclearandextendedfamily)2:extendedlargefamily/compoundisthemostcommonfamilytypeB:importanceofunilinealdescentgroupinsociety(2)0:nounilinealdescentgroup

1:unilinealdescentgrouponlyexistsinparticularsocialgroups(e.g.onlyimportantinnobility)2:unilinealdescentgroupisprevalentinallpartsofsocialgroupsC:localizedvs.nonlocalizeddescentgroup(2)0:thedescentgroupisdispersed.Unilineallyorbilaterallyrelatedindividualsarenotlocalizedinoneparticulararea.1:mixed2:thedescentgroupislocalized.Unilineallyrelatedindividualsliveinproximity(withinavillage,settlement,community,etc.)D:cooperationwithindescentgroup(2)0:thedescentgroupisnoncorporate.Individualreliesmoreonkindreds,networksofrelativesandfriends.1:thedescentgroupisaneconomicorpoliticalcorporationtosomeextent,butitsroleinsustainingcooperationislimited.2:thedescentgroup,actingasaneconomicandpoliticalcorporation,sustainscooperationwithinthegroupbyprovidingmemberspublicgoodsandsocialsafetynets,includingeducation,defenseandprotection,rituals,commoneconomicactivities,regulationofmarriage,ormutualassistance,etc.E:conflictresolution(2)0:authoritiesofthedescentgrouphasnoformalpowertoresolvedisputebetweenindividuals1:mixed2:authoritiesofthedescentgrouphavesupremepowertoresolvedisputesbetweenindividualswithinthegroup.Thewholedescentgrouphascollectiveresponsibilitywhileinconflictwithoutsiders.Socialstratification1:societyisnotstratified.Statusisnothereditary.Typicallyseeninpre-statesorintribes,clansbasedonkinship2:Fewdistinguishablesocialstrataexistedinsociety.Statusisnothereditaryforthemostcasesandwidespreadmobilitybetweendifferentsocialstrata3:Societyhasafewsocialstrata.Statusisnotstrictlyhereditaryandverticalmobilityispossiblethroughmeritocracy,individualskill,valor,pietyorwisdom4:Societyhasafewsocialstrata.Somestrataarehereditarywhilethereismobilityintheothers.(Example:Hereditaryfreemenandslaves.Lackedhereditaryaristocracywithinfreemen.theverticalmobilitywithinthegroupoffreemenispossibleandprevalent)5,6:Societyhasmanysocialstrata.Somestrataarehereditarywhilethereismobilityintheothers.(Example:Hereditaryfreemenandslaves.Weakhereditaryaristocracywithinfreemen.theverticalmobilitywithinthegroupoffreemenispossible)

7:Societyhasmanysocialstrata.Moststrataarehereditary;limitedverticalmobilitybetweenstrata.Example:hereditaryfreemenandslaves.Withinthefreemengroup,therewerethedistinctionsbetweenhereditaryaristocraticgroupsandcommoners/peasants/serfs8:Societyishighlystratified.Casteexistsinmostsocialclasses/groups.Anindividual’sstatusisalmosthereditary.Limitedverticalmobilityamongdifferentstratainthehierarchy9:Societyishighlystratified.Casteexistsinmostsocialclasses/groups.Anindividual’sstatusisalmoststrictlyhereditary.Limitedverticalmobilityamongdifferentstratainthehierarchy10:Societyishighlystratified.Strongcastedistinctioninalmostallclasses/groups.Anindividual’sstatusisstrictlyhereditary.VerylimitedverticalmobilityamongdifferentstratainthehierarchyEthnicdiversity1:perfectlyhomogeneous:singleethnicgroupsharingsameculture,ancestry,religion,andlanguage2:twomajorethnicgroupsroughly10%-20%to80%-90%3:twomajorethnicgroupsroughly1/3-2/34:twomajorethnicgroups50%-50%5:threemajorethnicgroups5%-20%-75%6:threemajorethnicgroups20%-30%-50%7:threemajorethnicgroups1/3,1/3,1/38:fourmajorethnicgroups9:fourormoreethnicgroups10:perfectlyheterogeneous:many(morethanfour)ethnicgroupswithdifferentculture,ancestry,religionandlanguages