Economic Analysis of Institutional Change in Ancient Greece This book presents an economic analysis of the causes and consequences of institutional change in ancient Athens. Focusing on the period 800–300 bce, it looks in particular at the development of political institutions and taxation, including a new look at the activities of individuals like Solon, Kleisthenes and Perikles and on the changes in political rules and taxation after the Peloponne- sian War. The process of institutional change in ancient Athens is analysed with the methods and concepts of New Institutional Economics. This brings a fresh per- spective to the understanding of the development of Athens. Using an economic theory- based approach allows different questions to be asked and different aspects of the ancient society come to the fore. This approach differentiates this book from previously published works on Ancient Athens. This economic paradigm provides a consistent framework that allows us to apply its conclusions to the modern world. Relevant lessons include the ubiquity of unforeseen consequences, the fact that motivation for change usually comes from people trying to prevent something unpleasant from happening rather than trying to achieve some positive and specified goal, and repercussions from trying to divide the population into groups with different privileges. It is valuable reading for all economists, economic historians and classical scholars who believe that a modern theoretical approach can better help us understand the lessons of the past. Carl Hampus Lyttkens is a Professor in the Department of Economics, Lund School of Economics and Management, Lund University, Sweden. 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Latham and 58 Economic Analysis of Heita Kawakatsu Institutional Change in Ancient Greece 53 German Immigration and Politics, taxation and rational Servitude in America, behaviour 1709–1920 Carl Hampus Lyttkens Farley Grubb Economic Analysis of Institutional Change in Ancient Greece Politics, taxation and rational behaviour Carl Hampus Lyttkens First published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2013 Carl Hampus Lyttkens The right of Carl Hampus Lyttkens to be identified as author of this work has been asserted by him in accordance with the Copyright, Designs and Patent Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data Hampus Lyttkens, Carl. Economic analysis of institutional change in ancient Greece/by Carl Hampus Lyttkens. p. cm. 1. Greece–Economic conditions–To 146 B.C. 2. Finance, Public– Greece–History. 3. Greece–Politics and government–To 146 B.C. I. Title. HC37.H36 2012 330.938–dc23 2012023113 ISBN: 978-0-415-63016-0 (hbk) ISBN: 978-0-203-07763-4 (ebk) Typeset in Times New Roman by Wearset Ltd, Boldon, Tyne and Wear Contents Preface x 1 Ancient Greece, institutional change and economic analysis 1 2 Historical background: ancient Greece from the demise of the Mycenaean society to the death of Alexander the Great 27 3 The emergence of the polis and its institutions 34 4 The road to democracy part one: a structural approach 52 5 The road to democracy part two: institutional change as individually rational action 70 6 Taxation – a ubiquitous phenomenon if there is one 96 7 Institutions and markets 118 8 Economic analysis of institutional change in ancient Athens – the past meets the present 135 Glossary 143 Notes 146 Bibliography 167 Index of passages cited 180 Index 182