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State Capacity, Conflict and Development

  • Timothy J. Besley
  • Torsten Persson

We report on an on-going project, which asks a number of questions relevant to the study of state capacity. What are the main economic and political determinants of the state's capacity to raise revenue and support private markets? How do risks of violent conflict affect the incentives to invest in state building? Does it matter whether conflicts are external or internal to the state? When are large states associated with higher income levels and growth rates than small states? What relations should we expect between resource rents, civil wars and economic development? The paper is organized into three main sections: 1. The origins of state capacity, 2. Sate capacity and the genius of taxation, and 3. State capacity and the strategy of conflict. Each of these begins with a specific motivation. A simple model is formulated to analyze the determinants of state capacity in the first section, and modified to address the new issues that arise in subsequent sections. The theoretical results are summarized in a number of propositions. We discuss the implications of the theory, comment on its relation to existing literature, and briefly mention some empiric applications.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15088.

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Date of creation: Jun 2009
Date of revision:
Publication status: published as Timothy Besley & Torsten Persson, 2010. "State Capacity, Conflict, and Development," Econometrica, Econometric Society, vol. 78(1), pages 1-34, 01.
Handle: RePEc:nbr:nberwo:15088
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  10. Rajan, Raghuram G. & Zingales, Luigi, 2003. "The great reversals: the politics of financial development in the twentieth century," Journal of Financial Economics, Elsevier, vol. 69(1), pages 5-50, July.
  11. Daron Acemoglu & Davide Ticchi & Andrea Vindigni, 2006. "Emergence and Persistence of Inefficient States," Carlo Alberto Notebooks 34, Collegio Carlo Alberto.
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  13. Daron Acemoglu, 2005. "Politics and Economics in Weak and Strong States," NBER Working Papers 11275, National Bureau of Economic Research, Inc.
  14. Timothy J. Besley & Torsten Persson, 2008. "The Incidence of Civil War: Theory and Evidence," NBER Working Papers 14585, National Bureau of Economic Research, Inc.
  15. Bénabou, Roland, 1996. "Inequality and Growth," CEPR Discussion Papers 1450, C.E.P.R. Discussion Papers.
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  18. Michael L. Ross, 2004. "What Do We Know about Natural Resources and Civil War?," Journal of Peace Research, Peace Research Institute Oslo, vol. 41(3), pages 337-356, May.
  19. Timothy Besley & Torsten Persson, 2009. "Repression or civil war?," LSE Research Online Documents on Economics 33748, London School of Economics and Political Science, LSE Library.
  20. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
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  24. Timothy Besley & Torsten Persson, 2008. "Wars and State Capacity," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 522-530, 04-05.
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