Nation-building, nationalism, and $$\hbox {wars}^*$$ wars ∗

This paper explores how wars make nations, above and beyond their need to raise the fiscal capacity to finance warfare. As army size increases, states change the conduct of war, switching from mercenaries to mass conscript armies. In order for the population to accept fighting and enduring wars, the government elites provide public goods, reduce rent-extraction, and adopt policies to build a nation – i.e., homogenize the culture of the population. Governments can instill “positive” national sentiment, in the sense of emphasizing the benefit of the nation, but they also can instill “negative” sentiment, in terms of aggressive propaganda against the opponent. We analyze these two types of nation-building and study their implications.