Abstract:

 In the latter half of the fourth millennium BC, our ancestors witnessed a remarkable
 transformation, progressing from simple agrarian villages to complex urban civilizations.
 In regions as far apart as the Nile Valley, Mesopotamia, Central Asia, and the Indus
 Valley, the first states appeared together with writing, cities with populations exceeding
 10,000, and unprecedented socio-economic inequalities. The cause of this “Urban Revolu
tion” remains unclear. We present new empirical evidence suggesting that the discovery
 of bronze and the ensuing long-distance trade played a crucial role. Using novel panel
 data and 2SLS techniques, we demonstrate that trade corridors linking metal mines to
 fertile lands were more likely to experience the Urban Revolution. We propose that tran
sit bottlenecks facilitated the emergence of a new taxing elite. We formally test this
 appropriability theory and provide several case studies in support.