Do Modern-Time Wars Make States? Panel Data Evidence

We re-examine the view that wars make strong states, taking advantage of panel data to address two of the most obvious endogeneity concerns that arise in this context: initial conditions and persistence of state capacity. Our main message is that, in modern times, there is no evidence that wars lead to strong states. In contrast to findings for earlier periods, our results show that external conflicts have displayed a negative correlation with traditional measures of state capacity in recent decades, which becomes insignificant after controlling for initial conditions and the persistence of state capacity. As in previous work, we find a negative capacity- internal conflict correlation, robust to controlling jointly for initial conditions and persistent effects.