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State Capacity and Military Conflict

Listed author(s):
  • Gennaioli, Nicola
  • Voth, Hans-Joachim

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.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8699.

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Date of creation: Dec 2011
Handle: RePEc:cpr:ceprdp:8699
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  1. Enrico Spolaore & Romain Wacziarg, 2016. "War and Relatedness," The Review of Economics and Statistics, MIT Press, vol. 98(5), pages 925-939, December.
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  5. Hans-Joachim Voth, 2013. "The Three Horsemen of Riches: Plague, War, and Urbanization in Early Modern Europe," Review of Economic Studies, Oxford University Press, vol. 80(2), pages 774-811.
  6. Greif, Avner, 1993. "Contract Enforceability and Economic Institutions in Early Trade: the Maghribi Traders' Coalition," American Economic Review, American Economic Association, vol. 83(3), pages 525-548, June.
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  8. Regina Grafe, 2012. "Distant Tyranny: Markets, Power, and Backwardness in Spain, 1650-1800," Economics Books, Princeton University Press, edition 1, number 9625.
  9. Drelichman, Mauricio & Voth, Hans-Joachim, 2010. "The Sustainable Debts of Philip II: A Reconstruction of Castile's Fiscal Position, 1566–1596," The Journal of Economic History, Cambridge University Press, vol. 70(04), pages 813-842, December.
  10. Landers, John, 2003. "The Field and the Forge: Population, Production, and Power in the Pre-industrial West," OUP Catalogue, Oxford University Press, number 9780199249169, April.
  11. Karaman, K. Kivanç & Pamuk, Şevket, 2010. "Ottoman State Finances in European Perspective, 1500–1914," The Journal of Economic History, Cambridge University Press, vol. 70(03), pages 593-629, September.
  12. Gregory Clark, 2007. "Introduction to A Farewell to Alms: A Brief Economic History of the World," Introductory Chapters,in: A Farewell to Alms: A Brief Economic History of the World Princeton University Press.
  13. Dincecco, Mark, 2009. "Fiscal Centralization, Limited Government, and Public Revenues in Europe, 1650–1913," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 48-103, March.
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