The Rise of the Modern State Since 1500: Annual Revenues of European and Other States

Recently, with the economic and political problems especially in developed countries and the Covid 19 pandemic, the place of the state in economic development is being debated once again. This presentation focuses on the simple ratio revenues as percent of GDP and summarizes the recently collected evidence about the growing role of the states in Europe and elsewhere during the last five centuries. It shows that revenues of states as a percent of GDP have been rising since the sixteenth century. This powerful trend began in Europe and has spread to the rest of the world including many of the developing countries since the second half of the nineteenth century. Historical examples going back to the era before the Industrial Revolution suggest that economic development took place not in countries where the state was small and weak, but in countries where a strong state supported economic development.