We combine the time inconsistency theory of state-building with the first provincial data set on the climate shocks, state institutions and population dynamics of Bronze Age Egypt to shed light on the alleged societal breakdown that followed the 4.2 ka BP megadrought. We document two key patterns. First, the 2300-2100 BCE string of droughts and low Nile floods pushed the Pharaohs of the late Old Kingdom and First Intermediate Period to acquiesce to a larger fiscal autonomy of the provinces hit the hardest by climate shocks. This discontinuity allowed locally-selected governors to shift the allocation of tax revenues towards the provision of the public goods preferred by the provincial non-elites, i.e., irrigation projects, defensive walls and risk-sharing instead of pyramids. Second, these reforms, which, in our model, sustain cooperation between the provincial non-elites and time-inconsistent elites, were related to a more resilient settlement. Our conclusions hold across identification strategies and are consonant with the idea that climate change shaped ancient Egypt directly via worse production conditions and indirectly via institutional resilience. learn more on SSRN