Agyrrhios’ Grain-Tax Law: Micro-Finance in 4th-Century Athens

Abstract

Within his Grain-Tax Law, Agyrrhios regulates bidders and bidding for the grain-tax assessed annually upon Lemnos, Imbros, and Skyros. Agyrrhios manages the distinctive risks posed by mandating an in-kind collection. The regulations also create incentives to attract a larger pool of competent bidders. The methods Agyrrhios employs are highly innovative and highly effective. Agyrrhios’ law embeds opportunities for significant, low-risk profits for tax-farmers. The regulations effectively address the adverse selection, moral hazard, and monitoring problems endemic to tax-farming and exacerbated by shifting to an in-kind collection. Agyrrhios structures the regulations much like the provisions governing “joint liability lending” contracts employed by contemporary micro-finance institutions in developing economies. Like group subscribers to micro-finance loans, Agyrrhios provides powerful incentives for concessionaires to form highly efficient syndicates (συμμορία) that are best equipped to collect the grain-tax and so provide “grain for the people” (ὅπως ἂν τῶι δήμωι σῖ[το]ς ἦι [5-6]).