JEL: N50, O43In early states, government elites provided both productivity-enhancing infrastructure, such as irrigation
systems, as well as seemingly non-productive monumental architecture like temples and pyramids.
The nature of this ”bread-and-circuses”-tradeoff is not well understood. In this paper, we examine this
phenomenon in the Classic Maya civilization (c. 250-950 CE) where city-state elites chose between
investing in essential water management infrastructure (reservoirs, canals), and monumental architecture.
We analyze information from 870 dated monuments from 110 cities. Correlating this dataset
with a proxy record for variations in annual rainfall, we find–perhaps counter-intuitively–that monumental
construction activity was more intense during drought years. A text analysis of 2.2 million
words from deciphered hieroglyphic inscriptions on monuments, further shows higher frequencies of
terms associated with war or violent conflict during periods of drought. We propose that in the Classic
Maya setting, with numerous small city-states, monument construction functioned as a costly signaling
device about state capacity, designed to attract labor for future control of revenue
