IDEAS home Printed from https://ideas.repec.org/p/hes/wpaper/0231.html
   My bibliography  Save this paper

Leviathan's Shadow: The Imperial Legacy of State Capacity and Economic Development in the Kingdom of Yugoslavia

Author

Listed:
  • Magnus Neubert

    (Leibniz Institute of Agricultural Development in Transition Economies, Martin-Luther-Universität Halle-Wittenberg)

Abstract

What is the effect of state capacity on economic development? I argue that strong and centralised states are capable of mobilising the resources required to establish an efficient administration and provide public goods, which are preconditions for modern economic growth. To test this hypothesis, I consider the long-lasting division of Yugoslavia between the Habsburg and the Ottoman empire whose state capacity diverged enormously. I introduce a novel dataset of decomposed GDP, industrial labour force shares and state capacity of 344 micro-regions in Yugoslavia shortly after the dissolution of those empires. By applying a spatial regression discontinuity design along the imperial border, I find that the Habsburg empire had a substantial positive effect on economic development and state capacity. Three types of causal mechanism analysis allow me to estimate the causal effect of state capacity on economic development. I find that a one standard deviation increase in state capacity enhances GDP per capita by 8-11% and the industrial labour force by 21-29%. My results shed new light on the medium-term effects of state capacity on economic development and the mechanisms at work.

Suggested Citation

  • Magnus Neubert, 2023. "Leviathan's Shadow: The Imperial Legacy of State Capacity and Economic Development in the Kingdom of Yugoslavia," Working Papers 0231, European Historical Economics Society (EHES).
    • Handle: RePEc:hes:wpaper:0231
    as

    Download full text from publisher

    File URL: https://www.ehes.org/wp/EHES_231.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Daron Acemoglu & Jacob Moscona & James A. Robinson, 2016. "State Capacity and American Technology: Evidence from the 19th Century," NBER Working Papers 21932, National Bureau of Economic Research, Inc.
    2. Jeremiah E. Dittmar, 2011. "Information Technology and Economic Change: The Impact of The Printing Press," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 126(3), pages 1133-1172.
    3. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    4. Inklaar, Robert & de Jong, Harmen & Bolt, Jutta & van Zanden, Jan, 2018. "Rebasing 'Maddison': new income comparisons and the shape of long-run economic development," GGDC Research Memorandum GD-174, Groningen Growth and Development Centre, University of Groningen.
    5. Amsden, Alice H., 1992. "Asia's Next Giant: South Korea and Late Industrialization," OUP Catalogue, Oxford University Press, number 9780195076035.
    6. Kerstin Enflo & Joan Ramón Rosés, 2015. "Coping with regional inequality in Sweden: structural change, migrations, and policy, 1860–2000," Economic History Review, Economic History Society, vol. 68(1), pages 191-217, February.
    7. Allen, Robert C., 2001. "The Great Divergence in European Wages and Prices from the Middle Ages to the First World War," Explorations in Economic History, Elsevier, vol. 38(4), pages 411-447, October.
    8. Rosés, Joan Ramón & Martínez-Galarraga, Julio & Tirado, Daniel A., 2010. "The upswing of regional income inequality in Spain (1860-1930)," Explorations in Economic History, Elsevier, vol. 47(2), pages 244-257, April.
    9. Antonio Savoia & Kunal Sen, 2015. "Measurement, Evolution, Determinants, And Consequences Of State Capacity: A Review Of Recent Research," Journal of Economic Surveys, Wiley Blackwell, vol. 29(3), pages 441-458, July.
    10. Dincecco,Mark, 2017. "State Capacity and Economic Development," Cambridge Books, Cambridge University Press, number 9781108439541.
    11. Daron Acemoglu & Jacob Moscona & James A. Robinson, 2016. "State Capacity and American Technology: Evidence from the Nineteenth Century," American Economic Review, American Economic Association, vol. 106(5), pages 61-67, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Esteban Muñoz-Sobrado & Amedeo Piolatto & Antoine Zerbini & Federica Braccioli, 2024. "The Taxing Challenges of the State: Unveiling the Role of Fiscal & Administrative Capacity in Development," Working Papers 1432, Barcelona School of Economics.
    2. Colin O'Reilly & Ryan H. Murphy, 2022. "An Index Measuring State Capacity, 1789–2018," Economica, London School of Economics and Political Science, vol. 89(355), pages 713-745, July.
    3. Geloso, Vincent J. & Salter, Alexander W., 2020. "State capacity and economic development: Causal mechanism or correlative filter?," Journal of Economic Behavior & Organization, Elsevier, vol. 170(C), pages 372-385.
    4. Christoph Kronenberg, 2021. "New(spaper) evidence of a reduction in suicide mentions during the 19th century US gold rush," Health Economics, John Wiley & Sons, Ltd., vol. 30(10), pages 2582-2594, September.
    5. Lecce, Giampaolo & Ogliari, Laura, 2019. "Institutional Transplant and Cultural Proximity: Evidence from Nineteenth-Century Prussia," The Journal of Economic History, Cambridge University Press, vol. 79(4), pages 1060-1093, December.
    6. Jiwei Qian & Tuan‐Hwee Sng, 2021. "The state in Chinese economic history," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 61(3), pages 359-395, November.
    7. Lu, Yi & Luan, Mengna & Sng, Tuan-Hwee, 2020. "Did the communists contribute to China’s rural growth?," Explorations in Economic History, Elsevier, vol. 75(C).
    8. Zhipeng Tang & Ziao Mei & Jialing Zou, 2021. "Does the Opening of High-Speed Railway Lines Reduce the Carbon Intensity of China’s Resource-Based Cities?," Energies, MDPI, vol. 14(15), pages 1-18, July.
    9. Zhou, Yixiao & Tyers, Rod, 2019. "Automation and inequality in China," China Economic Review, Elsevier, vol. 58(C).
    10. Sloczynski, Tymon, 2018. "A General Weighted Average Representation of the Ordinary and Two-Stage Least Squares Estimands," IZA Discussion Papers 11866, Institute of Labor Economics (IZA).
    11. Shruti Rajagopalan & Alex Tabarrok, 2021. "Simple rules for the developing world," European Journal of Law and Economics, Springer, vol. 52(2), pages 341-362, December.
    12. Badi H. Baltagi & Ying Deng & Jing Li & Zhenlin Yang, 2023. "Cities in a pandemic: Evidence from China," Journal of Regional Science, Wiley Blackwell, vol. 63(2), pages 379-408, March.
    13. Xu Wang & Xiaobo Zhang & Zhuan Xie & Huang Yiping, 2016. "Roads to Innovation: Firm-Level Evidence from China," Working Papers id:11121, eSocialSciences.
    14. Julia Cagé & Valeria Rueda, 2016. "The Long-Term Effects of the Printing Press in Sub-Saharan Africa," American Economic Journal: Applied Economics, American Economic Association, vol. 8(3), pages 69-99, July.
    15. Alicia Gómez-Tello & Alfonso Díez-Minguela & Julio Martinez-Galarraga & Daniel A. Tirado, 2019. "Regional prices in early twentieth-century Spain: a country-product-dummy approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(2), pages 245-276, May.
    16. Yue Lu & Siying Yang & Jian Li, 2022. "The influence of high-speed rails on urban innovation and the underlying mechanism," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-20, March.
    17. Acemoglu, Daron & Robinson, James A. & Torvik, Ragnar, 2020. "The political agenda effect and state centralization," Journal of Comparative Economics, Elsevier, vol. 48(4), pages 749-778.
    18. Boerner, Lars & Rubin, Jared & Severgnini, Battista, 2021. "A time to print, a time to reform," European Economic Review, Elsevier, vol. 138(C).
    19. Roberto Ricciuti & Antonio Savoia & Kunal Sen, 2019. "What determines administrative capacity in developing countries?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(5), pages 972-998, October.
    20. Ciani Emanuele & Fisher Paul, 2019. "Dif-in-Dif Estimators of Multiplicative Treatment Effects," Journal of Econometric Methods, De Gruyter, vol. 8(1), pages 1-10, January.

    More about this item

    Keywords

    State Capacity; Economic Development; Habsburg Empire; Yugoslavia;
    All these keywords.

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:hes:wpaper:0231. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Paul Sharp (email available below). General contact details of provider: https://edirc.repec.org/data/ehessea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.