Institutional Development, Capital Accumulation, and the Emergence of Civilizations
Abstract: This paper examines the hypothesis that institutional development, in the form of property rights, may have played a key role in facilitating agricultural capital accumulation, which in turn promoted the emergence of early civilizations. We rely on a falsification approach that examines Neolithic settlements in riverine environments along major ancient trade routes, and argue that neither geography nor trade---two main fundamental determinants of growth---were not sufficient to ensure the emergence of civilizations between 4500 and 1600 BCE. We go on to show that a distinguishing feature of these early civilizations was the development of institutional regimes that offered either actual or notional respect for property rights, and the importance of the development of writing in supporting such regimes.
