Historical Underpinnings of Institutions: Evidence from the Neolithic Revolution

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This paper provides evidence that the Neolithic Revolution, during which humans adopted agriculture for the first time, may have affected modern institutions by influencing the spread of early institutions. Using novel vegetation data and carbon dates that show the initial agricultural adoption from various Neolithic archaeological sites, as well as data on the level of executive power and local tax levels in Europe and East Asia, the paper shows that regions which experienced adoption of agriculture early also witnessed more autocratic, extractive institutions in modern periods. It also offers an explanation for the finding, suggesting that the diffusion of farmers during the Revolution led to establishment of different institutions, and that this divergence has persisted over generations.