The Origins of Democracy: A Model with Application to Ancient Greece
This paper seeks to provide an improved understanding of the origins of democracy. It begins by developing a theoretical model to demonstrate how exogenous economic conditions can influence the incentives to establish democratic institutions. The model predicts that democratic institutions will expand where they mitigate important time-inconsistency problems and, therefore, encourage investment. Exogenous conditions determine the magnitude of those time-inconsistency problems and, hence, the likelihood of democracy. A comparison of ancient Greek city-states suggests that the conditions under which democracy first emerged support the model. Other potential applications are discussed.
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