This chapter covers issues of land and housing in peri-urban areas, which have experienced fast-paced industrial and infrastructure development. It examines the precariousness of urban dwellers, most of whom are migrants from other provinces to the city, who seek to build their own house to settle down and achieve a sense of stability in the city. There is an ongoing tension between these people’s sense of autonomy and their right to housing, and their sense of economic and political disadvantage in the land and housing markets, which are fraught with brokerage and corruption. The chapter investigates how these people engage in illegal construction activities, by building their houses on cheap, low-priced agricultural land that is not legally designated for residential purposes, to achieve stability. Yet as a result of their actions, these urban dwellers became trapped in precarious situations. Their settlement was subject to surveillance by the local authority and some people even lost their houses following government measures to crackdown on illegal construction.

This chapter reviews the literature on the origins of cities and states. We argue that purely agricultural societies are unlikely to have cities because population dispersal reduces travel costs for farmers and herders. But incentives for agglomeration could arise from the productivity of urban manufacturing, the need for collective defense, or cultural factors. We supplement our study of Mesopotamia with archaeological data on state formation in Egypt, the Indus Valley, China, Mesoamerica, and the Andes. All of these cases had highly productive food technologies, pre-existing stratification, and close links with urbanization. Based on our models in Chapters 6, 8, and 10, we suggest three pathways to a state. In the “property rights hypothesis,” improving food technology and long-run population growth lead to the creation of elite property rights over the best sites, a shrinking commons, and falling commoner wages. This eventually triggers urban manufacturing and city-state formation. In the “elite warfare hypothesis,” warfare among elites over land rents causes defensive agglomeration in cities and territorial expansion by successful elites. In the “environmental shift hypothesis,” commoner populations migrate toward refuge sites (often river valleys) controlled by local elites, again leading to falling commoner wages, urbanization, and state formation.

This chapter constructs a formal model of our hypothesis from Chapter 9 about the rise of Uruk. We assume there are many open sites where people can obtain food by foraging, farming, or pastoralism. There is also one site controlled by a local elite. We start from an equilibrium with mild stratification, reflecting the conditions of the ’Ubaid period. A climate shift toward increasing aridity reduces the productivities of sites dependent on rainfall but does not affect the productivity of the elite-controlled site where irrigation is based on river water. This lowers commoner food income and shifts population toward elite-controlled land. The declining standard of living for commoners makes it profitable for the elite to create urban workshops producing textiles and other goods, where manufacturing has aggregate increasing returns to scale. The taxation of manufacturing allows the elite to enforce monopolistic output restrictions, driving up the price of manufactured goods and driving down the wage. Organized elites may want to establish city-states based upon manufacturing even if they lack interest in public goods, because taxation can be used to enhance private elite consumption. The key tradeoff for the elite involves profit from manufacturing versus land rent from agriculture.

After an introductory section that frames some conceptual issues surrounding the emergence of city-states, most of the chapter is devoted to a chronological narrative describing the case of southern Mesopotamia. This includes sections on the pre-’Ubaid period, the ’Ubaid period, the Uruk period, and the post-Uruk period. The key puzzle is how to explain the transition from scattered villages and small towns in the ’Ubaid period to large city-states with tens of thousands of residents in the Uruk period. Following the main narrative, we review causal hypotheses on this subject proposed by archaeologists and economists. These include ideas about climate change, migration, food production, manufacturing, trade, warfare, and culture. We also offer a synthesis of our own. In our view, the prime mover was increasing aridity, which motivated migration from outlying areas toward the south. As this process unfolded, commoner living standards fell, which enabled local elites in the south to employ commoners at a lower wage. When the wage had fallen far enough, urban manufacturing became profitable. Elite taxation of urban manufacturing was probably easier than taxation of rural agriculture, and this provided the fiscal foundations for early city-states like Uruk.

In Chapter 7 I move onto the case study of Botswana, which in contrast to Somalia and Uganda has experienced structural transformation due in large part to its diamond industry. Industrialization in Botswana has led to a sectoral shift out of agriculture as workers have left rural areas to move to cities and join the modern workforce, thereby leading to a decline in the relative value of rural land. I employ both qualitative and quantitative evidence to show that ethnic fractionalization has declined in Botswana since the mid-twentieth-century and examine parliamentary debates around ethnic identity. Moreover, I show that this shift has happened not because of but largely despite efforts of the Botswanan state, which has both discouraged rural-urban migration and failed to alleviate institutional ethnic inequalities that persist to the present day. Finally, I consider alternative explanations for ethnic homogenization in Botswana and find them all wanting.

Here I provide an overview of the concepts of ethnicity and industrialization. I first define ethnic groups as descent-based groups and show how vertical ethnic change can take place, both through the consolidation of smaller ethnic groups into larger ones as well as assimilation into a national identity. The chapter also discusses why the book focusses on what I call vertical ethnic change instead of horizontal ethnic change, namely because the former is far more prevalent than the latter. I then provide a similar overview of the concept of industrialization, by focussing on how industrialization has historically involved a shift in the focus of the economy from rural agriculture to urban employment and from land to labour as the predominant factor of production. I justify my use of carbon emissions as my predominant cross-national quantitative measure of industrialization and my use of urbanization as my main proxy for industrialization for regions or communities within countries.

This chapter provides a survey of the close of the Late Bronze Age and the rise of Iron Age towns, and delivers an updated synthesis of existing evidence and arguments for climatic shifts across the eastern Mediterranean from the twelfth to fourth centuries BCE. Kearns then undertakes an island-wide comparative analysis of ruralization and urbanization apparent in survey records by the mid-first millennium BCE. Focusing on legacy and recent survey data, the chapter argues for oscillations in sedentism across the island as communities experienced environmental changes and cultivated new weathering practices, and situates the re-emergence of social differentiation in the relationships between households and land and new spaces for public gathering at tombs and shrines.

After the Neolithic transition, arguably the most important economic shift was the industrial revolution. Prior to the industrial revolution, for the previous 10,000 years, the world relied (almost) exclusively on small-scale agriculture or pastoralism for economic production. The industrial revolution, starting largely with the development of the steam engine, had a profound effect on the material relationship of the individual to economic production, as individuals became part of industrial production. This change also had significant impacts on demographics: cities grew as the economics drove mass migrations away from rural areas to industrialized areas. Industrialization also had a long-lasting effect on politics, as workers organized to make improvements in working conditions and shift the power balance between labor and capital. Marxism was born of this struggle, and I explore the premises behind this philosophy, and the reasons for expansion as well as ultimate failure of this profoundly influential economic model. Here I speak to the contradictions between modern humanism and the authoritarian application of Marxism, drawing in the discussion on chaos and complexity and the difficulties with attempting central control on something as complex as a national economy.

The conquest of Egypt and Asia, leading to new urban and fiscal infrastructures and new forms and levels of elite consumption, increased the scale of trade and exchange in the Hellenistic economy. Complex institutional changes that were spurred by both fiscal-military demand and local responses to this demand changed agrarian and commercial patterns, with likely positive effects on local markets. This chapter argues that the Hellenistic period was one of moderate economic growth both in the Greek poleis of the Aegean and in the core regions of Hellenistic Asia and Egypt. The greater presence of Roman traders in the Hellenistic East from the second century onwards is also likely to have had positive effects on market exchange and monetary circulation. Yet there is reason to assume that in the final decades of the Hellenistic period, all Hellenistic regions to some extent, but particularly the Aegean and Asia Minor, suffered from the destructive forces of the Roman military presence and subsequent tributary exploitation. Only after the Roman civil wars came to an end and fiscal practices were better regulated did the economies of the East begin to recover and to expand along the pathways that had developed in the Hellenistic period.

The chapter surveys the economy of Asia Minor from the late archaic period to the end of the Hellenistic era. Asia Minor forms the largest land mass in the northern Mediterranean and is characterized by a diverse geography with different levels of integration into the Greek world and its economy. Throughout time, urbanization significantly intensified; nevertheless, many regions preserved a rural character. Agriculture was most important, in both the land of the poleis and land controlled by the Achaemenid and Hellenistic kings. Production was directed to local needs, but some agrarian products also served as exports; non-agrarian production was less significant. Asia Minor was rich in natural resources, and fishing was important in a few coastal cities. The birthplace of coinage in the late seventh century, Asia Minor saw the circulation of many coinages over time and was highly monetarized at least by the end of the Hellenistic period. These coinages mirror the frequent changes in a political landscape that was characterized by different strata of authority, from the royal administration down to the city-states and villages. Through taxation, public expenditures, and by securing an institutional framework, these authorities shaped the complex conglomerate of Asia Minor’s economy.

In this chapter, I emphasise and try to explain the importance of historical demography for economic history, but also its relative neglect by ancient historians until very recently. Demography involves a range of quantitative measures that are useful both as proxies for economic performance and in comparison. Population sizes and trends also have explanatory power for past economic changes. Some general points about the relationship between population and economy, and what changed and what stayed the same over the last millennium BCE are followed by some more specific observations about the major periods of Greek history. The importance of environmental factors is particularly emphasised, and urbanization is a persistent theme.

Chapter 1 describes the motivations of the Islamists, who crafted what became the 1996 Local Councils Law. In the face of protests and riots in the nation’s cities, Islamist lawmakers in the fourth Islamic Majles (1992–1996) turned to political decentralization to address poorly managed urbanization and local governance as a way of easing economic stresses among lower economic classes that had spurred unrest. The chapter explores the 1996 Local Councils Law in detail, including the structure and the responsibilities of elected local government comprising three institutions: the elected Islamic city council (shura-ye eslami shahr), the mayor (shahrdar), and the municipal bureaucracy (shahrdari). The chapter goes on to explain the institutional design and structure of elected local government and its place in the intergovernmental system resulting from the decentralization reforms. It highlights the tension between two parallel vertical systems of hierarchical governance, between the top-down appointed system bureaucratic hierarchy and the bottom-up. The contradiction between the two systems results from the tension between two counterpoised systems of upward and downward accountability.