Abstract

We estimate the effect of six river shifts in southern Iraq in a new archeological panel dataset. A shift creates a demand for government because private river irrigation needs to be replaced with public canals. We show three main results. First, where rivers shift states form, and existing states expand their capacity. Second, these states raise taxes and build canals to replace river irrigation. Third, where canals are built, population stays constant or even increases. Absent canals, the population migrates away. Our results are inconsistent with theories of public good provision that emphasize private negotiation as a substitute for government.