The economic and institutional determinants of trade expansion in Bronze Age Greater Mesopotamia

• Published in: Journal of archaeological science Vol. 131; p. 105398
• Main Authors: Benati, Giacomo, Guerriero, Carmine, Zaina, Federico
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01-07-2021
• Subjects: Gravity trade models; Merchant institutions; Mesopotamia; Risk-sharing; Trade; Trade; Gravity trade models; Mesopotamia; Risk-sharing; Merchant institutions
• ISSN: 0305-4403; 1095-9238
• DOI: 10.1016/j.jas.2021.105398

The focus of archaeologists on reconstructing exchange and communication networks in the past resulted in the enormous improvement of methods for analyzing material flows and detecting trade routes. However, our understanding of the determinants of trade patterns over time and space is still limited. To help tackle this issue, we study through regression analysis the rich economic and institutional experience of Bronze Age Greater Mesopotamia. Our testable predictions originate from three main economic theories of trade expansion. First, because of trade costs, mutually beneficial exchanges are discouraged by distance and encouraged by the relative size of markets. Second, trade expands when more suitable farming conditions in neighboring polities allow consumption risk-sharing. Finally, trade develops when interlocking exchange circuits ease the canalization of goods from the outside by providing secure routes, a more certain resolution of legal disputes and credit provision. Ordinary Least Squares—OLS—estimates based on data on 44 major Mesopotamian polities observed for each half-century between 3050 and 1750 BCE are consistent with these predictions. Our approach provides a robust theory-based empirical strategy for integrating archaeological, environmental, and historical data and calls for a tighter interdisciplinary cooperation.
•We analyze the long run/large-scale changes in the trading patterns of Bronze Age Mesopotamia and their determinants.•We employ econometrics to analyze trade expansion through archaeological, environmental, and historical proxies.•Our sample is a novel panel dataset on the 44 major Greater Mesopotamian polities observed for each half-century between 3050 and 1750 BCE.•Regression analysis indicates that trade was favored by spatial proximity, risk-sharing, and the rise of merchant institutions.