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State Capacity, Conflict and Development

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  • Timothy Besley
  • Torsten Persson

Abstract

We report on an on-going project, which asks a number of questions relevant to thestudy of state capacity. What are the main economic and political determinants ofthe state's capacity to raise revenue and support private markets? How do risks ofviolent conflict affect the incentives to invest in state building? Does it matterwhether conflicts are external or internal to the state? When are large statesassociated with higher income levels and growth rates than small states? Whatrelations should we expect between resource rents, civil wars and economicdevelopment? The paper is organized into three main sections: 1. The origins of statecapacity, 2. Sate capacity and the genius of taxation, and 3. State capacity and thestrategy of conflict. Each of these begins with a specific motivation. A simple modelis formulated to analyze the determinants of state capacity in the first section, andmodified to address the new issues that arise in subsequent sections. The theoreticalresults are summarized in a number of propositions. We discuss the implications ofthe theory, comment on its relation to existing literature, and briefly mention someempiric applications.

Suggested Citation

  • Timothy Besley & Torsten Persson, 2009. "State Capacity, Conflict and Development," STICERD - Economic Organisation and Public Policy Discussion Papers Series 010, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  • Handle: RePEc:cep:stieop:010
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    More about this item

    Keywords

    state capacity; development;

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • H10 - Public Economics - - Structure and Scope of Government - - - General
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism

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