State Capacity and Long-Run Performance

Dincecco, Mark and Katz, Gabriel (2012): State Capacity and Long-Run Performance.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: political regimes, state capacity, public services, economic performance, European history
• Subjects: H - Public Economics > H1 - Structure and Scope of Government > H11 - Structure, Scope, and Performance of Government; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O43 - Institutions and Growth; N - Economic History > N4 - Government, War, Law, International Relations, and Regulation > N43 - Europe: Pre-1913

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