Even the Ottoman tax farmer approach worked pretty well with a good CEO/Sultan, largely because it was a fairly flat structure with people acting autonomously. The Sultan provided the right incentives, and right up until Suleiman the Magnificent changed it for his successors the system threw up high quality Sultans. It was pretty much devised by Sultan Orhan's brother and vizier Aladdin.
"In the time of the Roman Empire, civic life was divided between the Blue and Green factions".
That's wrong. In the later centuries of the Roman Empire, civic life was divided between the Red, White, Blue and Green factions. The first two vanished in the early part of the Byzantine Empire, so the description is true of the period of the Byzantine Empire under consideration (which still called itself the Roman Empire).
There is some reason to believe that the factions were more than just sporting associations, also handling some militia functions for the defence of Constantinople.