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State Capacity and Military Conflict

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  • Gennaioli, Nicola
  • Voth, Hans-Joachim

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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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8699.

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Date of creation: Dec 2011
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Handle: RePEc:cpr:ceprdp:8699

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Keywords: ethnicity; fragmentation; military conflict; state capacity; taxation; war;

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References

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  1. Mauricio Drelichman & Joachim Voth, 2006. "The sustainable debts of Philip II: A reconstruction of Castile's fiscal position, 1566-1596," Economics Working Papers 1121, Department of Economics and Business, Universitat Pompeu Fabra, revised May 2009.
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  3. Enrico Spolaore & Romain Wacziarg, 2009. "War and Relatedness," Discussion Papers Series, Department of Economics, Tufts University 0734, Department of Economics, Tufts University.
  4. Landers, John, 2003. "The Field and the Forge: Population, Production, and Power in the Pre-industrial West," OUP Catalogue, Oxford University Press, number 9780199249169.
  5. De Long, J Bradford & Shleifer, Andrei, 1993. "Princes and Merchants: European City Growth before the Industrial Revolution," Journal of Law and Economics, University of Chicago Press, vol. 36(2), pages 671-702, October.
  6. Nico Voigtländer & Joachim Voth, 2008. "The three horsemen of riches: Plague, war and urbanization in early modern Europe," Economics Working Papers 1115, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2012.
  7. Mauricio Drelichman & Hans-Joachim Voth, 2008. "Debt Sustainability in Historical Perspective: The Role of Fiscal Repression," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 657-667, 04-05.
  8. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World
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  9. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-48, June.
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  11. Dincecco, Mark, 2009. "Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650–1913," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 48-103, March.
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Citations

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Cited by:
  1. 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.
  2. Federico Boffa & Amedeo Piolatto & Giacomo A. M. Ponzetto, 2012. "Centralization and Accountability: Theory and Evidence from the Clean Air Act," CERIS Working Paper 201213, Institute for Economic Research on Firms and Growth - Moncalieri (TO).
  3. repec:cge:warwcg:118 is not listed on IDEAS
  4. James Fenske, 2012. "Ecology, trade and states in pre-colonial Africa," CSAE Working Paper Series 2012-18, Centre for the Study of African Economies, University of Oxford.
  5. Johnson, Noel D & Koyama, Mark, 2012. "Legal Centralization and the Birth of the Secular State," MPRA Paper 40887, University Library of Munich, Germany.
  6. Besley, Timothy J. & Persson, Torsten, 2013. "Taxation and Development," CEPR Discussion Papers 9307, C.E.P.R. Discussion Papers.
  7. 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.
  8. Lagerlöf, Nils-Petter, 2014. "Population, technology and fragmentation: The European miracle revisited," Journal of Development Economics, Elsevier, vol. 108(C), pages 87-105.
  9. 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.
  10. Dincecco, Mark & Katz, Gabriel, 2012. "State Capacity and Long-Run Performance," MPRA Paper 38299, University Library of Munich, Germany.
  11. 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.

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