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War, Capital, and the Birth of the State: A Mean Field Theory of Endogenous Political Dominance

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  • Heng-fu Zou

Abstract

This paper develops a dynamic stochastic model of state formation from an anarchic condition, integrating insights from Hobbes, Nozick, and Tilly within a mean field game framework. A continuum of agents, each equipped with capital and arms, optimize consumption, investment, and military spending while facing externalities from the militarization of others. Recursive military advantage allows some agents to defeat ri- vals, seize resources, and transition into dominant protective agencies— emergent states. We formalize war as a capital transfer mechanism and taxation as a means of fiscal consolidation. The model produces endoge- nous divergence in coercive and productive capacity, demonstrating how military asymmetries, recursive violence, and fiscal extraction lead to the birth and persistence of centralized authority.

Suggested Citation

  • Heng-fu Zou, 2025. "War, Capital, and the Birth of the State: A Mean Field Theory of Endogenous Political Dominance," CEMA Working Papers 754, China Economics and Management Academy, Central University of Finance and Economics.
    • Handle: RePEc:cuf:wpaper:754
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    References listed on IDEAS

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    1. Heng-Fu Zou, 1997. "Dynamic analysis in the Viner model of mercantilism," Journal of International Money and Finance, Elsevier, vol. 16(4), pages 637-651, August.
    2. Gong, Liutang & Zou, Heng-fu, 2003. "Military spending and stochastic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 28(1), pages 153-170, October.
    3. Zou, Heng-fu, 1995. "A dynamic model of capital and arms accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 19(1-2), pages 371-393.
    4. Powell, Robert, 2006. "War as a Commitment Problem," International Organization, Cambridge University Press, vol. 60(1), pages 169-203, January.
    5. Fearon, James D., 1995. "Rationalist explanations for war," International Organization, Cambridge University Press, vol. 49(3), pages 379-414, July.
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    Keywords

    State formation; mean field games; military asymmetry; capital accumulation; war and taxation; dynamic political economy;
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