Comparative Economic History

Abstract

We explore in this chapter a new direction in comparative economics: comparative economic history. Building on research by archeologists and economic historians, we survey some of the work on differences in institutions in the ancient past. We report on a novel data-gathering exercise on institutions in antiquity, finding two clear clusters: with some systems we call “statist” systems, like in ancient Egypt or China, which relied on some form of central planning in the allocation of resources, with very little private property, while other societies had thriving market systems with strong private property rights. The difference between these institutions in antiquity can be related to differences between individualist and collectivist cultures that play an important role in the modern world.

Appendix: Scoring Rules for Our Institutional Variables

(Numbers indicate the score)

1.1 Legal Institutions

1.1.1 Land Ownership

• 1: No evidence of private ownership, all land property belongs to the state or the ruler.

• 2: No evidence of private ownership in society, state ownership and institutional ownership.

• 3: No evidence of private ownership, communal ownership dominates. Land exchange is very limited (may only exist between tribes, villages or communities under very specific conditions).

• 4: Private ownership is limited and coexists with communal or institutional ownership. Land is inheritable within the family. Land transaction is rare.

• 5: Private ownership coexists with communal or institutional ownership. Land is conditionally inheritable. Land transaction (leasing, purchase and sale) is present but conditional, limited or restricted.

• 6: Private land ownership dominates. Land is conditionally inheritable. Land transaction is very rare.

• 7: Private land ownership dominates. Land is inheritable. Land transaction is rare.

• 8: Mostly private land ownership by individual. Land is inheritable. Some evidence of land transaction (leasing, purchase and sale).

• 9: Mostly private land ownership by individual. Land can be inherited, rent or sold and disposed at the owner’s own will. Land transaction is common.

• 10: Mostly private land ownership by individual. Land can be inherited, rent or sold and disposed at the owner’s own will. Land transaction is very common and land market exists.

1.1.2 Private Slavery

Four sub-variables: (A) prevalence of private slavery, (B) legal or social norm of slavery, (C) presence of slave trade and slave market and (D) (private) slave population

A: Prevalence of Private Slavery

• 1: Almost all unfree labors are owned as public slaves working for the ruler, the state or public institutions (temples, armies, etc.); no private slavery.

• 2: Most unfree labors are public slaves.

• 3: Private slaves and other types of unfree dependent labor such as serfs coexist.

• 4: Most unfree labor are private slaves.

• 5: Predominant most unfree labors are owned as private slaves.

B: Legal or Social Norm of Slavery

• 1: Slaves are not recognized as property but usually being regarded as servants or dependents of the ruler. Slaves cannot be mortgaged, bought or sold; or no slaves.

• 2: Slaves are not defined as property but usually being regarded as servants or dependents of the ruler or master. Slaves can rarely be transferred or mortgaged under special conditions.

• 3: Slaves are not defined as property but retain certain rights as person. Slaves are bounded to land or clans and generally cannot be bought, mortgaged or sold conditionally (debt bondage, limited service slavery, etc.).

• 4: Slaves are not defined as full private property but only partially or conditionally or they retain certain rights as person. Slaves can be mortgaged, bought or sold.

• 5: Slaves are defined in law or custom as full private property, and they can be mortgaged, bought or sold at the owner’s will.

C: Presence of Slave Trade and Slave Market

• 1: Absence or near absence of slave market or slave trade.

• 2: Slave markets and slave trade exists but limited in scale.

• 3: Slave market and slave trade exist.

• 4: Active slave trade and slave market; a large number of slaves are traded.

• 5: Very active private slave trade and private slave market; very large number of slaves traded in markets.

D: Private Slave Population

• 1: No (private) slave population.

• 2: Private slaves constitute a very small portion of total population.

• 3: Private slaves constitute a portion of total population.

• 4: Private slaves constitute a large portion of total population.

• 5: Private slaves constitute a very large portion of total population.

1.1.3 Composite Law Index

Sum of three variables: property law, contract law and formal public law

A. Property Law

• 0: No mention of private property nor its protection or no concept of private property. Strong emphasis against transgression against state property.

• 1: No mention of private property nor its protection, or no concept of private property.

• 2: No explicit mention of protection of private property, but written codes on transfer of property, inheritance of property of individuals and how to solve disputes on property.

• 3: Written codes on transfer of property, inheritance of property of individuals and how to solve disputes on property, and the law also explicitly mentions protection of private property against potential expropriation.

B. Contract Law

• 0: No mention of contract in laws (the existence of commercial law usually suggests contract law).

• 1: Unwritten or customary law that has cases related to contract.

• 2: Written contract law mentioning cases of contract and enforcement.

• 3: Written contract law that has detailed conditions on regulation and enforcement of contract.

C. Comparison on Public Law

• 0: No procedural law, usually no specific procedure is followed.

• 1: Procedure but little protection.

• 2: Some formalized way of procedure.

• 4: Written procedural law.

Note. Customary law=0 or 1

1.2 Political Institutions

1.2.1 Government Centralization

Sum of two variables (concentration of power and degree of centralization)

Concentration of Power in Executive in the Central Government 1−5

• 1: The ruler’s executive power is greatly limited by legislature and judiciary institutions. The ruler is subject to changes made by elections or assembly disapproval.

• 2: The ruler has large power in the executive realm but is limited in others.

• 3: The ruler has large power in legislature, executive and judiciary realms but his power constrained by other organizations or institutions (term limits, assembly consent, legal constraints, etc.).

• 4: The ruler has large power in legislature, executive and judiciary realms, but his power is potentially constrained.

• 5: The ruler has unlimited power in legislature, executive and judiciary realms. The ruler generally rules for life.

Relationship Between Central and Local Governments 1−5

• 1: Decentralized. The local government is independent from the center. The central government has no power in appointing local officials or intervening local administration.

• 2: Decentralized. The local government is de facto autonomous from the center. The central government has limited power in appointing local officials or intervening local administration.

• 3: Centralized delegational system. The local government is administered by hereditary local rulers, and the central government cannot replace local officials at will. No separation of different aspects of local administration.

• 4: Centralized bureaucracy. The local government is directly appointed by and responsible to the central government. The separation of powers and regular transfer of local officials are not institutionalized or not executed.

• 5: Centralized bureaucracy. The local government is administered by separate officials who are directly appointed by and responsible to the central government. Local officials cannot appoint lower-level officials at will, and they are transferred at regular intervals.

*A total score of 1 if no political authority beyond community (e.g. autonomous bands and villages)

1.2.2 Importance of Cities

Urbanization Rate:

• 0: Completely rural.

• 1: The polity has only a few settlements/towns, cities in the real sense do not exist; low urban population. =0%

• 2: The polity has a few towns or large settlements; relatively low urban population. <5%

• 3: The polity has a number of towns or cities, medium-level urban population. 5−10%

• 4: The polity has a notable number of towns and cities; urban population is relatively high. 10−15%

• 5: The polity is highly urbanized. Population is concentrated in urban centers and very high. >15%

Commercial Function of Cities:

• 1: Almost all cities are administrative/ceremonial/military centers; cities are not commercial centers.

• 2: Cities mostly are administrative/ceremonial/military centers; some commercial function.

• 3: Cities combined the function of administration and commerce.

• 4: Cities are primarily commercial and manufacturing centers.

• 5: Cities are commercial and manufacturing centers.

1.3 Sociological Institutions

1.3.1 Importance of Clan

Scores are based on the sum of scores of the following five variables.

A: Family Type (Nuclear Family vs. Extended Family) (2)

• 0: Nuclear family is the most common family type.

• 1: Mixed (stem families or mixed nuclear and extended family).

• 2: Extended large family/compound is the most common family type.

B: Importance of Unilineal Descent Group in Society (2)

• 0: No unilineal descent group.

• 1: Unilineal descent group only exists in particular social groups (e.g. only important in nobility).

• 2: Unilineal descent group is prevalent in all parts of social groups.

C: Localized vs. Non-Localized Descent Group (2)

• 0: The descent group is dispersed. Unilineally or bilaterally related individuals are not localized in one particular area.

• 1: Mixed.

• 2: The descent group is localized. Unilineally related individuals live in proximity (within a village, settlement, community, etc.).

D: Cooperation Within Descent Group (2)

• 0: The descent group is noncorporate. Individual relies more on kindreds, networks of relatives and friends.

• 1: The descent group is an economic or political corporation to some extent, but its role in sustaining cooperation is limited.

• 2: The descent group, acting as an economic and political corporation, sustains cooperation within the group by providing members public goods and social safety nets, including education, defense and protection, rituals, common economic activities, regulation of marriage, or mutual assistance and so on.

E: Conflict Resolution (2)

• 0: Authorities of the descent group has no formal power to resolve dispute between individuals.

• 1: Mixed.

• 2: Authorities of the descent group have supreme power to resolve disputes between individuals within the group. The whole descent group has collective responsibility while in conflict with outsiders.

1.3.2 Social Stratification

• 1: Society is not stratified. Status is not hereditary. Typically seen in pre-states or in tribes, clans based on kinship.

• 2: Few distinguishable social strata existed in society. Status is not hereditary for the most cases and widespread mobility between different social strata.

• 3: Society has a few social strata. Status is not strictly hereditary, and vertical mobility is possible through meritocracy, individual skill, valor, piety or wisdom.

• 4: Society has a few social strata. Some strata are hereditary, while there is mobility in the others. (Example: hereditary freemen and slaves. Lacked hereditary aristocracy within freemen. The vertical mobility within the group of freemen is possible and prevalent.)

• 5, 6: Society has many social strata. Some strata are hereditary while there is mobility in the others. (Example: Hereditary freemen and slaves. Weak hereditary aristocracy within freemen. The vertical mobility within the group of freemen is possible.)

• 7: Society has many social strata. Most strata are hereditary; limited vertical mobility between strata. Example: hereditary freemen and slaves. Within the freemen group, there were the distinctions between hereditary aristocratic groups and commoners/peasants/serfs.

• 8: Society is highly stratified. Caste exists in most social classes/groups. An individual’s status is almost hereditary. Limited vertical mobility among different strata in the hierarchy.

• 9: Society is highly stratified. Caste exists in most social classes/groups. An individual’s status is almost strictly hereditary. Limited vertical mobility among different strata in the hierarchy.

• 10: Society is highly stratified. Strong caste distinction in almost all classes/groups. An individual’s status is strictly hereditary. Very limited vertical mobility among different strata in the hierarchy.

1.3.3 Ethnic Diversity

• 1: Perfectly homogeneous: single ethnic group sharing the same culture, ancestry, religion and language.

• 2: Two major ethnic groups roughly 10−20% to 80−90%.

• 3: Two major ethnic groups roughly 1/3−2/3.

• 4: Two major ethnic groups 50−50%.

• 5: Three major ethnic groups 5–20–75%.

• 6: Three major ethnic groups 20–30–50%.

• 7: Three major ethnic groups 1/3, 1/3, 1/3.

• 8: Four major ethnic groups.

• 9: Four or more ethnic groups.

• 10: Perfectly heterogeneous: many (more than four) ethnic groups with different culture, ancestry, religion and languages.