Trade and the Rise of Ancient Greek City-States

Abstract

This paper theoretically synthesizes the neo-institutionalist, neo-physiocrat, and neo-classical frameworks and helps empirically explain the development of ancient city-states. I first develop a model that clarifies the causal effects of geography and trade on production, appropriation, and defense. I then examine a major implication of trade, that potential crop diversity is important for all outcomes, amongst the ancient Greek city-states. An exploratory analysis suggests the magnitude of the gains from trade is fundamental for explaining economic, military, and political development. Non-parametric tests confirm that comparative-advantage variables are statistically significant and not the abundance of `key crops'.