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State Capacity and Public Goods: Institutional Change, Human Capital, and Growth in Historic Germany

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  • Dittmar, Jeremiah
  • Meisenzahl, Ralf

Abstract

What are the origins and consequences of the state as a provider of public goods? We study institutional changes that increased state capacity and public goods provision in German cities during the 1500s. Cities that adopted institutional change subsequently began to differentially produce and attract human capital and grow faster. Institutional change occurred where ideological competition introduced by the Protestant Reformation interacted with local politics. We study plagues that shifted local politics in a narrow period as sources of exogenous variation in institutions, and find support for a causal interpretation of the relationship between institutional change, human capital, and growth.

Suggested Citation

  • Dittmar, Jeremiah & Meisenzahl, Ralf, 2017. "State Capacity and Public Goods: Institutional Change, Human Capital, and Growth in Historic Germany," CEPR Discussion Papers 12037, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:12037
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    References listed on IDEAS

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    1. Mayshary, Joram & Moav, Omer & Neeman, Zvika & Pascali, Luigi, 2015. "Cereals Appropriability and Hierarchy," CAGE Online Working Paper Series 238, Competitive Advantage in the Global Economy (CAGE).
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    3. Timothy Besley & Torsten Persson, 2011. "Pillars of Prosperity: The Political Economics of Development Clusters," Economics Books, Princeton University Press, edition 1, number 9624.
    4. Davide Cantoni, 2012. "Adopting a New Religion: the Case of Protestantism in 16th Century Germany," Economic Journal, Royal Economic Society, vol. 122(560), pages 502-531, May.
    5. Daron Acemoglu & Suresh Naidu & Pascual Restrepo & James A. Robinson, 2014. "Democracy Does Cause Growth," NBER Working Papers 20004, National Bureau of Economic Research, Inc.
    6. Mara P. Squicciarini & Nico Voigtländer, 2015. "Human Capital and Industrialization: Evidence from the Age of Enlightenment," The Quarterly Journal of Economics, Oxford University Press, vol. 130(4), pages 1825-1883.
    7. repec:ecj:econjl:v:122:y:2012:i::p:502-531 is not listed on IDEAS
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    More about this item

    Keywords

    education; growth; Human Capital; institutions; Political Economy; Public Goods; State Capacity;

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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