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State Capacity and Military Conflict

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  • Nicola Gennaioli
  • Hans-Joachim Voth

Abstract

In 1500, Europe was composed of hundreds of statelets and principalities, with weak central authority, no monopoly over the legitimate use of violence, and multiple, overlapping levels of jurisdiction. By 1800, Europe had consolidated into a handful of powerful, centralized nation states. We build a model that simultaneously explains both the emergence of capable states and growing divergence between European powers. In our model, the impact of war on the European state system depends on: i) the importance of money for determining the war outcome (which stands for the cost of war), and ii) a country's initial level of domestic political fragmentation. We emphasize the role of the "Military Revolution", which raised the cost of war. Initially, this caused more internally cohesive states to invest more in state capacity, while other (more divided) states rationally dropped out of the competition. This mechanism leads to both increasing divergence between European states, and greater average investments in state building on the continent overall.

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Bibliographic Info

Paper provided by Barcelona Graduate School of Economics in its series Working Papers with number 593.

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Date of creation: Oct 2013
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Handle: RePEc:bge:wpaper:593

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Keywords: state capacity; war; military revolution; taxation; political economy;

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  5. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World
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Cited by:
  1. Boffa, F. & Piolatto, A. & Ponzetto, G.A.M., 2012. "Centralization and Accountability: Theory and Evidence from the Clean Air Act," Discussion Paper 2012-033, Tilburg University, Center for Economic Research.
  2. Lagerlöf, Nils-Petter, 2014. "Population, technology and fragmentation: The European miracle revisited," Journal of Development Economics, Elsevier, vol. 108(C), pages 87-105.
  3. repec:cge:warwcg:118 is not listed on IDEAS
  4. Johnson, Noel D. & Koyama, Mark, 2013. "Legal centralization and the birth of the secular state," Journal of Comparative Economics, Elsevier, vol. 41(4), pages 959-978.
  5. Dincecco, Mark & Katz, Gabriel, 2012. "State Capacity and Long-Run Performance," MPRA Paper 38299, University Library of Munich, Germany.
  6. Fenske, James, 2010. "Ecology, trade and states in pre-colonial Africa," MPRA Paper 27203, University Library of Munich, Germany.
  7. 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.
  8. Noel D., Johnson & Mark, Koyama, 2012. "Standardizing the fiscal state: cabal tax farming as an Intermediate Institution in early-modern England and France," MPRA Paper 40403, University Library of Munich, Germany.
  9. Mark Dincecco & Massimiliano Gaetano Onorato, 2013. "Military Conflict and the Economic Rise of Urban Europe," Working Papers 7/2013, IMT Institute for Advanced Studies Lucca, revised Nov 2013.
  10. Daron Acemoglu & Camilo García-Jimeno & James A. Robinson, 2014. "State Capacity and Economic Development: A Network Approach," NBER Working Papers 19813, National Bureau of Economic Research, Inc.
  11. Johnson, Noel D. & Koyama, Mark, 2014. "Tax farming and the origins of state capacity in England and France," Explorations in Economic History, Elsevier, vol. 51(C), pages 1-20.

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