Nber Working Paper Series the Paradox of Civilization: Pre-institutional Sources of Security and Prosperity

The rise of civilizations involved the dual emergence of economies that could produce surplus (“prosperity”) and states that could protect surplus (“security”). But the joint achievement of security and prosperity had to escape a paradox: prosperity attracts predation, and higher insecurity discourages the investments that create prosperity. We study the trade-offs facing a proto-state on its path to civilization through a formal model informed by the anthropological and historical literatures on the origin of civilizations. We emphasize pre-institutional forces, such as physical aspects of the geographical environment, that shape productive and defense capabilities. The solution of the civilizational paradox relies on high defense capabilities, natural or manmade. We show that higher initial productivity and investments that yield prosperity exacerbate conflict when defense capability is fixed, but may allow for security and prosperity when defense capability is endogenous. Some economic shocks and military innovations deliver security and prosperity while others force societies back into a trap of conflict and stagnation. We illustrate the model by analyzing the rise of civilization in Sumeria and Egypt, the first two historical cases, and the civilizational collapse at the end of the Bronze Age. Ernesto Dal Bó University of California, Berkeley Haas School of Business 545 Student Services Building #1900 Berkeley, CA 94720-1900 and NBER [email protected] Pablo Hernández New York University Abu Dhabi PO Box 903 New York City, NY 10276-0903 [email protected] Sebastián Mazzuca Johns Hopkins University Department of Political Science 338 Mergenthaler Hall 3400 N. Charles Street Baltimore, MD 21218 [email protected]