Discussion paper

DP8548 Transparency, Appropriability and the Early State

We propose a general theory that explains the extent of the state and accounts for related institutions as byproducts of the state's extractive technology. We posit further that this extractive technology is determined by the transparency of the production technology. This theory is applied to examine two principal phases in the evolution of the early state. First, we argue that the common explanation of the emergence of the state as a consequence of the availability of food surplus due to the Neolithic Revolution is flawed, since it ignores Malthusian considerations. In contrast, we suggest that what led to the emergence of the state was a transformation of the tax technology that was induced by the greater transparency of the new farming technology. We then apply our theory to explain key institutional features that distinguished ancient Egypt from ancient Mesopotamia, and, in particular, to explain their different land tenure regimes.


Mayshar, J, O Moav and Z Neeman (2011), ‘DP8548 Transparency, Appropriability and the Early State‘, CEPR Discussion Paper No. 8548. CEPR Press, Paris & London. https://cepr.org/publications/dp8548