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State Capacity and Long-Run Performance

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  • Dincecco, Mark
  • Katz, Gabriel

Abstract

We examine the long-term links between state capacity and economic performance. Our database is novel and spans 11 countries and 4 centuries in Europe, the birthplace of modern economic growth. A dynamic simultaneous equation panel model indicates that the performance effects of states with modern extractive and productive capabilities are significant, large, and robust to a broad range of specifications, controls, and sub-samples. We find that the establishment of an effective state increased per capita GDP by 7 percent over a half-century and by 11 percent over a full century.

Suggested Citation

  • Dincecco, Mark & Katz, Gabriel, 2012. "State Capacity and Long-Run Performance," MPRA Paper 38299, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:38299
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Tuan-Hwee Sng & Chiaki Moriguchi, 2014. "Asia’s little divergence: state capacity in China and Japan before 1850," Journal of Economic Growth, Springer, vol. 19(4), pages 439-470, December.
    2. Ko, Chiu Yu & Koyama, Mark & Sng, Tuan-Hwee, 2014. "Unified China; Divided Europe," MPRA Paper 60418, University Library of Munich, Germany.
    3. Daron Acemoglu & Camilo García-Jimeno & James A. Robinson, 2015. "State Capacity and Economic Development: A Network Approach," American Economic Review, American Economic Association, vol. 105(8), pages 2364-2409, August.
    4. repec:ial:wpaper:7/2013 is not listed on IDEAS
    5. Jørgen Juel Andersen & Mads Greaker, 2014. "The fiscal incentive of GHG cap and trade. Permits may be too cheap and developed countries may abate too little," Discussion Papers 785, Statistics Norway, Research Department.
    6. Cingolani L, 2013. "The State of State Capacity : a review of concepts, evidence and measures," MERIT Working Papers 053, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. Cingolani, Luciana & Thomsson, Kaj & de Crombrugghe, Denis, 2015. "Minding Weber More Than Ever? The Impacts of State Capacity and Bureaucratic Autonomy on Development Goals," World Development, Elsevier, vol. 72(C), pages 191-207.

    More about this item

    Keywords

    political regimes; state capacity; public services; economic performance; European history;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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