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Warfare, fiscal capacity, and performance

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  • Mark Dincecco

    ()

  • Mauricio Prado

    ()

Abstract

We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples. Copyright Springer Science+Business Media, LLC 2012

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Bibliographic Info

Article provided by Springer in its journal Journal of Economic Growth.

Volume (Year): 17 (2012)
Issue (Month): 3 (September)
Pages: 171-203

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Handle: RePEc:kap:jecgro:v:17:y:2012:i:3:p:171-203

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Web page: http://www.springerlink.com/link.asp?id=102931

Related research

Keywords: Pre-modern wars; Fiscal capacity; Public services; Worker productivity; C20; H10; O10; N40;

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Citations

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Cited by:
  1. James Fenske, 2012. "Ecology, Trade and States in Pre-Colonial Africa," Economics Series Working Papers WPF/2012-18, University of Oxford, Department of Economics.
  2. Cingolani, Luciana, 2013. "The State of State Capacity: a review of concepts, evidence and measures," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  3. Davide Cantoni & Noam Yuchtman, 2013. "The Political Economy of Educational Content and Development: Lessons from History," CESifo Working Paper Series 4221, CESifo Group Munich.
  4. Toke Aidt & Peter Jensen, 2013. "Democratization and the size of government: evidence from the long 19th century," Public Choice, Springer, vol. 157(3), pages 511-542, December.
  5. Timothy Besley & Torsten Persson, 2013. "Taxation and Development," STICERD - Economic Organisation and Public Policy Discussion Papers Series 41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  6. Lagerlöf, Nils-Petter, 2014. "Population, technology and fragmentation: The European miracle revisited," Journal of Development Economics, Elsevier, vol. 108(C), pages 87-105.
  7. Baskaran, Thushyanthan & Bigsten, Arne, 2013. "Fiscal Capacity and the Quality of Government in Sub-Saharan Africa," World Development, Elsevier, vol. 45(C), pages 92-107.
  8. Dincecco, Mark & Katz, Gabriel, 2012. "State Capacity and Long-Run Performance," MPRA Paper 38299, University Library of Munich, Germany.
  9. Cingolani, Luciana & Thomsson, Kaj & de Crombrugghe, Denis, 2013. "Minding Weber more than ever? The impacts of State Capacity and Bureaucratic Autonomy on development goals," MERIT Working Papers 052, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

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