Nicholas Kyriazis

Democracy, Sea Power and Institutional Change: An Economic Analysis of the Athenian Naval Law

The present essay attempts to test the validity of the theory of institutional change based on the concept of property rights, in the remote historical setting of Classical Athens. The “Naval Law” introduced by Themistocles in 483-2 BC, established the institution of trierarchy to produce warships to face the Persian invaders. This reform led to the first attempt to define the costs and benefits of public goods in the field of national defense. Thus, institutional change in Ancient Athens, through an efficient arrangement of property rights and duties, had long-term consequences on economic performance, creating a new growth path and ensuring economic prosperity and social justice for more than 150 years.

Path dependence, change and the emergence of the first joint-stock companies

This paper presents a model of path dependence and change and focuses on the gaining of new institutional knowledge. The main thesis is that in ‘extraordinary’ historical situations the possibility of change increases as a result of external pressure and successful adaptation to it. The model is tested applying it to the case study of seventeenth-century United Provinces (Dutch Republic). Such a situation existed in the sixteenth–seventeenth-century United Provinces, due to their uprising against Spanish rule. Because there existed no strong central authority, the decision-makers had to develop new institutions in order to successfully capture the lucrative spice trade from their enemies. The solution was the joint-stock company, which, through the phases of a continuous decision-making procedure, developed into the ‘permanent’ Dutch East India Company (VOC) in parallel also to the development of the Amsterdam Stock Exchange.

Democracy and Education: A History from Ancient Athens

In the present essay we present first a theoretical model, introducing the term “macroculture” as a long-term set of norms, values, institutions, and organizations that characterize societies. We analyze how a/new democratic macroculture emerged for the first time in the Greek city-states by the end of the sixth century BCE. We then, inspired by Humboldt’s work on education as a condition for the good functioning of democracy, taking a case study, Classical Athens. Athenians were well aware that for a smooth functioning of democracy the citizens, who voted in the Assembly under direct democracy procedures, had to be educated. Thus, they could find good solutions in the decision process of the Assembly. To achieve this, they introduced some ingenious policy measures.

The Glue of Democracy: Economics, Warfare and Values in Classical Greece

In the present essay we analyse the links between the emergence of new arms and forms of war-emergence, the phalanx and its hoplites, and the trieres at sea, its economic base, and the emergence of democracy in classical Greece. We propose that the unique till then in the world phalanx formation, led to the development of particular values and ethics, which again were the necessary conditions for the emergence of democracy, then again, a unique phenomenon. We then turn to seapower, which according to our analysis was a sufficient condition for the establishment and endurance of democracy, because seapower led to a community of economic interests, on which direct democracies like Ancient Athens, were based.

Property Rights and Game-Theory Implications of Satellite Communications: The Bilateral Case of Greece and Russia

In this paper we examine the actual legal situation concerning the attribution of geostatic positions and frequencies and the problems of frequency interference by other satellites due to not fully clear property rights. We analyze the property rights setting governing satellite communications and review the implications of the Coase theorem of these rules through a game theoretical approach between two players: Russia and Greece (Hellasat commercial communication attempt). The basic finding, in accordance with the theorems prediction under non-zero and possibly high transaction costs, is that the end result may be sub-optimal due to the inappropriate present specification of property rights, leading either to non-use of scarce resources, or to total over-investment.

War for profit: English corsairs, institutions and decentralised strategy

In this study, we propose that in states with relatively weak central authorities, decision-makers had to develop market-oriented organisation solutions to successfully face a grave external threat, and these solutions proved to be efficient. Using an interdisciplinary approach that combines institutional theory, history and strategy, we analyse a case study, the use of corsairs (privateers) by England in the late sixteenth and early seventeenth centuries. We have found that the development of partnership companies went hand in hand for commercial and military purposes. English privateers proved to be economically efficient and superior to the centrally planned war operations of the Spanish empire.

The emergence and the evolution of property rights in ancient Greece

In this paper, we trace the emergence and the evolution of property rights from the Homeric Era (1100–750 BCE) to Classical Greece, based on ancient sources and modern interpretations. Indications of the emergence of property rights are to be found in the writings of eighth century Homer and Hesiod. Property rights evolved, together with changes in warfare and city-states during the Archaic and Classical periods, becoming more secure and specific, based on contracts. We analyse as case studies Themistocles’ Naval Law of 483/2 BCE and Nicophons Monetary Law of 376/5. We also cover some other aspects of property rights, such as commercial transactions and the enforcement of contracts, official (written) law and legally binding procedures of law enforcement, banking services and the rights of women.

The First Joint-Stock Companies: The Emergence of Democratic Elements in Business

There is a substantial and growing literature on the emergence of joint–stock companies (Lawson 1993; Bowen 2006; Leeson 2009; Robins 2012; Roy 2012; Kyriazis et al. 2015; Vlami 2015 amongst others) their operations and a discussion of specific aspects, as for example, the principal-agent problem (Carlos 1992; Carlos and Stephen 1996) or their influence on history, such as the expansion of European states in Asia and their transformation into empires (Boxer 1965; Rodger 1997, 2004; Gaastra 2003; Krishna 2014).

The Qualities and Workings of Direct Democracy: Lessons from Classical Athens

Drawing on classical Athens the paper outlines the qualities and workings of direct democracy to provide a simple model of public choice in policy-making. In particular, the paper conceptualizes Athenian democracy as an institution which is founded on two pillars: public discourse and public ideology. The former refers to the reciprocal communication between citizens enabling, inter alia, the integration of diverse knowledge and the coordination of collective action. The latter refers to a pragmatic set of social values (i.e. emerged dialectically as a result of ongoing collective experiences) enabling to reduce diversity of thought and behavior and with it many of the collective-action problems that communities encounter. On the basis of these, direct democracy as an institution is able to internalize the costs and benefits of decision-making, to actively engage citizens in the political and policy-making process, to enhance the community’s knowledge base, and to deliver cooperative and innovative solutions to matters of public concern.

Commercial Banking Profitability in Post Communist Countries: The Role of Entrepreneurship: 1990-2004

The contribution of the present paper is twofold. First, it introduces a practical estimation of banking entrepreneurial reward (remuneration) and uses it as a variable in order to estimate its effect on bank profitability (in the capitalistic countries as well as in the post communist ones). Second, it points out that post communist countries start to behave as capitalists in the banking sector, since it is shown that entrepreneurship has a positive impact on banking profitability. Each country is regarded as a commercial banking sector. All variables of the model refer to an annual average country level for the period 1990-2004. Panel data are elaborated by using the Eviews software package.