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State Capacity and Military Conflict

Author

Listed:
  • 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.

Suggested Citation

  • Nicola Gennaioli & Hans-Joachim Voth, 2013. "State Capacity and Military Conflict," Working Papers 593, Barcelona School of Economics.
  • Handle: RePEc:bge:wpaper:593
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    More about this item

    Keywords

    state capacity; war; military revolution; taxation; political economy;
    All these keywords.

    JEL classification:

    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H56 - Public Economics - - National Government Expenditures and Related Policies - - - National Security and War
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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