State capacity and long-run performance

Dincecco, Mark and Katz, Gabriel (2012): State capacity and long-run performance.

Abstract

We present new evidence about 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. Using standard panel data methods, we find that the performance impacts of states with modern extractive and productive capabilities are significant, large, and robust to a wide variety of specifications, controls, and modeling techniques.

• Item Type: MPRA Paper
• Language: English
• Keywords: political regime types, 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

References

\bibitem[Acemoglu(2005)]{Acemoglu} Acemoglu, D. (2005). ``Politics and Economics in Weak and Strong States.'' {\it Journal of Monetary Economics}, 52: 1199-226.

\bibitem[Acemoglu and Robinson(2000)]{Acemoglu-Robinsona} Acemoglu, D. and J. Robinson (2000). ``Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective.'' {\it Quarterly Journal of Economics}, 115: 1167-99.

\bibitem[Acemoglu and Robinson(2012)]{Acemoglu-Robinsonb} Acemoglu, D. and J. Robinson (2012). {\it Why Nations Fail}. London: Profile.

\bibitem[Acemoglu et al.(2001)]{Acemoglu-Johnsona} Acemoglu, D., S. Johnson, and J. Robinson (2001). ``Colonial Origins of Comparative Development: An Empirical Investigation.'' {\it American Economic Review}, 91: 1369-401.

\bibitem[Acemoglu et al.(2002)]{Acemoglu-Johnsonb} Acemoglu, D., S. Johnson, and J. Robinson (2002). ``Reversal of Fortune: Geography and Development in the Making of the Modern World Income Distribution.'' {\it Quarterly Journal of Economics}, 117: 1231-94.

\bibitem[Acemoglu et al.(2004)]{Acemoglu-Verdier} Acemoglu, D., J. Robinson, and T. Verdier (2004). ``Alfred Marshall Lecture -- Kleptocracy and Divide-and-Rule: A Model of Personal Rule.'' {\it Journal of the European Economic Association}, 2: 162-92.

\bibitem[Acemoglu et al.(2005a)]{Acemoglu-Johnsonc} Acemoglu, D., S. Johnson, and J. Robinson (2005a). ``The Rise of Europe: Atlantic Trade, Institutional Change, and Economic Growth.'' {\it American Economic Review}, 94: 546-79.

\bibitem[Acemoglu et al.(2005b)]{Acemoglu-Johnsond} Acemoglu, D., S. Johnson, and J. Robinson (2005b). ``Institutions as a Fundamental Cause of Economic Growth.'' In P. Aghion and S. Durlauf, eds., {\it Handbook of Economic Growth}, Amsterdam: Elsevier.

\bibitem[Acemoglu et al.(2008)]{Acemoglu-Yareda} Acemoglu, D., S. Johnson, J. Robinson, and P. Yared. ``From Education to Democracy?'' {\it American Economic Review}, 98: 808-42.

\bibitem[Acemoglu et al.(2009)]{Acemoglu-Yaredb} Acemoglu, D., S. Johnson, J. Robinson, and P. Yared. ``Reevaluating the Modernization Hypothesis.'' {\it Journal of Monetary Economics}, 56: 1043-58.

\bibitem[Acemoglu et al.(2011a)]{Acemoglu-Ticchia} Acemoglu, D., Ticchi, D., and A. Vindigni (2011). ``Emergence and Persistence of Inefficient States.'' {\it Journal of the European Economic Association}, 9: 177-208.

\bibitem[Acemoglu et al.(2011b)]{Acemoglu-Cantoni} Acemoglu, D., D. Cantoni, S. Johnson, and J. Robinson (2011). ``The Consequences of Radical Reform: The French Revolution.'' {\it American Economic Review}, 101: 3286-307.

\bibitem[Ahn and Schmidt(1995)]{Ahn-Schmidt} Ahn, S. and P. Schmidt (1995). ``Efficient Estimation of Models for Dynamic Panel Data.'' {\it Journal of Econometrics}, 68: 5-27.

\bibitem[Aghion et al.(2012)]{Aghion-Persson} Aghion, P., T. Persson, and D. Rouzet (2012). ``Education and Military Rivalry.'' NBER Working Paper 18049.

\bibitem[Arellano and Bover(1995)]{Arellano-Bover} Arellano, M. and O. Bover (1995). ``Another Look at the Instrumental Variables Estimation of Error-Components Models.'' {\it Journal of Econometrics}, 68: 29-51.

\bibitem[Baltagi(2005)]{Baltagi} Baltagi, B. (2005). {\it Econometric Analysis of Panel Data}. West Sussex: John Wiley \& Sons.

\bibitem[Banerjee and Iyer(2005)]{Banerjee-Iyer} Banerjee, A. and L. Iyer (2005). ``History, Institutions, and Economic Performance: The Legacy of Colonial Land Tenure Systems in India.'' {\it American Economic Review}, 95: 1190-1213.

\bibitem[Barro and Urs\'{u}a(2010)]{Barro-Ursua} Barro, R. and J. Urs\'{u}a (2010). ``Barro-Urs\'{u}a Macroeconomic Dataset.'' http://rbarro.com/data-sets/

\bibitem[Bates(2001)]{Bates} Bates, R. (2001). {\it Prosperity and Violence}. New York: Norton.

\bibitem[Beck and Levine(2004)]{Beck-Levine} Beck, T. and R. Levine (2004). ``Stock Markets, Banks, and Growth: Panel Evidence.'' {\it Journal of Banking \& Finance}, 28: 432-44.

\bibitem[Besley and Kudamatsu(2008)]{Besley-Kudamatsu} Besley, T. and M. Kudamatsu (2008). ``Making Autocracy Work.'' In E. Helpman, ed., {\it Institutions and Economic Performance}, Cambridge, MA: Harvard University Press.

\bibitem[Besley and Persson(2011)]{Besley-Perssond} Besley, T. and T. Persson (2011). {\it The Pillars of Prosperity.} Princeton: Princeton University Press.

\bibitem[Blundell and Bond(1998)]{Blundell-Bond} Blundell, R. and S. Bond (1998). ``Initial Conditions and Moment Restrictions in Dynamic Panel Data Models.'' {\it Journal of Econometrics}, 87: 115-43.

\bibitem[Bockstette et al.(2002)]{Bockstette-Chanda} Bockstette, V., Chanda, A., and L. Putterman (2002). ``States and Markets: The Advantage of an Early Start.'' {\it Journal of Economic Growth}, 7: 347-69.

\bibitem[Bogart(2005)]{Bogarta} Bogart, D. (2005). ``Did Turnpike Trusts Increase Transportation Investment in Eighteenth-Century England?'' {\it Journal of Economic History}, 65: 439-68.

\bibitem[Bogart(2008)]{Bogartb} Bogart, D. (2008). ``Engines of Development?'' Mimeo, University of California, Irvine.

\bibitem[Bonney(1995)]{Bonney} Bonney, R. (1995). {\it Economic Systems and State Finance}. Oxford: Oxford University Press.

\bibitem[Brewer(1989)]{Brewer} Brewer, J. (1989). {\it The Sinews of Power.} London: Unwin Hyman.

\bibitem[Brosio and Marchese(1986)]{Brosio-Marchese} Brosio, G. and C. Marchese (1986). {\it Il potere di spendere}. Bologna: Il Mulino.

\bibitem[Cardoso and Lains(2010)]{Cardoso-Lains} Cardoso, J. and P. Lains (2010). ``Public Finance in Portugal, 1796-1910.'' In J. Cardoso and P. Lains, eds., {\it Paying for the Liberal State}, Cambridge, UK: Cambridge University Press.

\bibitem[Carreras and Tafunell(2006)]{Carreras-Tafunell} Carreras, A. and X. Tafunell (2006). {\it Estad\'{i}sticas Hist\'{o}ricas de Espana}. Madrid: Fundación BBVA.

\bibitem[Carstairs(1980)]{Carstairs} Carstairs, A. (1980). {\it A Short History of Electoral Systems in Western Europe.} London: George Allen.

\bibitem[Chanda and Putterman(2007)]{Chanda-Putterman} Chanda, A. and L. Putterman (2007). ``Early Starts, Reversals, and Catch-up in the Process of Economic Development.'' {\it Scandinavian Journal of Economics}, 109: 387-413.

\bibitem[Clemens and Williamson(2004)]{Clemens-Williamson} Clemens, M. and J. Williamson (2004). ``Wealth Bias in the First Global Capital Market Boom, 1870-1913'' {\it Economic Journal}, 114: 311-44.

\bibitem[Comin et al.(2010)]{Easterly-Comin} Comin, D., W. Easterly, and E. Gong (2010). ``Was the Wealth of Nations Determined in 1000 BC?'' {\it American Economic Journal: Macroeconomics}, 2: 65-97.

\bibitem[Cox(2011)]{Cox} Cox, G. (2011). ``War, Moral Hazard, and Ministerial Responsibility: England After the Glorious Revolution.'' {\it Journal of Economic History}, 71: 133-61.

\bibitem[De Long and Shleifer(1993)]{DeLong-Shleifer} De Long, B. and A. Shleifer (1993). ``Princes and Merchants: European City Growth Before the Industrial Revolution.'' {\it Journal of Law and Economics}, 36: 671-702.

\bibitem[De Vries(1984)]{DeVries} De Vries, J. (1984). {\it European Urbanization, 1500-1800}. Cambridge, MA: Harvard University Press.

\bibitem[Dell(2010)]{Dell} Dell, M. (2010). ``The Persistent Effects of Peru's Mining {\it Mita}.'' {\it Econometrica}, 78: 1863-1903.

\bibitem[Dincecco(2011)]{Dinceccob} Dincecco, M. (2011). {\it Political Transformations and Public Finances}. Cambridge, UK: Cambridge University Press.

\bibitem[Dincecco and Prado(2012)]{Dincecco-Prado} Dincecco, M. and M. Prado (2012). ``Warfare, Fiscal Capacity, and Performance.'' Forthcoming, {\it Journal of Economic Growth}.

\bibitem[Donaldson(2010)]{Donaldson} Donaldson, D. (2010). ``Railroads of the Raj: Estimating the Impact of Transportation Infrastructure.'' Mimeo, Massachusetts Institute of Technology.

\bibitem[Donaldson and Hornbeck(2012)]{Donaldson-Hornbeck} Donaldson, D. and R. Hornbeck (2012). ``Railroads and American Economic Growth: A 'Market Access' Approach.'' Mimeo, Harvard University.

\bibitem[Duflo et al.(2007)]{Dufloetal} Duflo, E., R. Glennerster, and M. Kremer (2007). ``Using Randomization in Development Economics Research: A Toolkit.'' In T. Schultz and J. Strauss, eds., {\it Handbook of Development Economics}, Amsterdam: North Holland.

\bibitem[Eaton and Kortum(2002)]{Eaton-Kortum} Eaton, J. and S. Kortum (2002). ``Technology, Geography, and Trade.'' {\it Econometrica}, 70: 1741-79.

\bibitem[Engerman and Sokoloff(1997)]{Engerman-Sokoloff} Engerman, S. and K. Sokoloff (1997). ``Factor Endowments, Institutions, and Differential Paths of Growth among New World Economies.'' In S. Haber, ed., {\it How Latin America Fell Behind}, Palo Alto: Stanford University Press.

\bibitem[Epstein(2000)]{Epstein} Epstein, S. (2000). {\it Freedom and Growth}. London: Routledge.

\bibitem[Fontvieille(1976)]{Fontvieille} Fontvieille, L. (1976). {\it \'{E}volution et croissance de l'\'{E}tat francais, 1815-1969}. Paris: Institut des Sciences Mathématiques et Economiques Appliquées.

\bibitem[Foreman-Peck(2011)]{Foreman} Foreman-Peck, J. (2011). ``The Western European Marriage Pattern and Economic Development.'' {\it Explorations in Economic History}, 48: 292-309.

\bibitem[Gennaioli and Voth(2012)]{Gennaioli-Voth} Gennaioli, N. and H.J. Voth (2012). ``State Capacity and Military Conflict.'' Mimeo, Pompeu Fabra University.

\bibitem[Gerschenkron(1966)]{Gerschenkron} Gerschenkron, A. (1966). {\it Economic Backwardness in Historical Perspective}. Cambridge, MA: Belknap Press.

\bibitem[Glaeser et al.(2004)]{Glaeser-LaPorta} Glaeser, E., R. La Porta, F. Lopez-de-Silanes, and A. Shleifer (1999). ``Do Institutions Cause Growth?'' {\it Journal of Economic Growth}, 9: 271–303.

\bibitem[Greene(2003)]{Greene} Greene, W. (2003). {\it Econometric Analysis}. Upple Saddle River: Prentice Hall.

\bibitem[Hall and Jones(1999)]{Hall-Jones} Hall, R. and C. Jones (1999). ``Why Do Some Countries Produce So Much More Output per Worker than Others?'' {\it Quarterly Journal of Economics}, 114: 83-116.

\bibitem[Herbst(2000)]{Herbst} Herbst, J. (2000). {\it States and Power in Africa}. Princeton: Princeton University Press.

\bibitem[Heston et al.(2006)]{Hestonetal} Heston, A., R. Summers, and B. Aten (2006). ``Penn World Tables, Version 6.2.'' Center for International Comparisons of Production, Income and Prices, University of Pennsylvania.

\bibitem[Hintze(1906)]{Hintze} Hintze, O. (1906). ``Military Organization and the Organization of the State.'' In F. Gilbert, ed., {\it The Historical Essays of Otto Hintze} [1975], New York: Oxford University Press.

\bibitem[Hobson(1993)]{Hobson} Hobson, J. (1993). ``The Military-Extraction Gap and the Wary Titan: The Fiscal-Sociology of British Defence Policy, 1870-1913.'' {\it Journal of European Economic History}, 22: 466-507.

\bibitem[Hoffman(2009)]{Hoffman} Hoffman, P. (2009). ``Why Was It that Europeans Conquered the World?'' Mimeo, California Institute of Technology.

\bibitem[Hoffman and Rosenthal(1997)]{Hoffman-Rosenthala} Hoffman, P. and J.L. Rosenthal (1997). ``The Political Economy of Warfare and Taxation in Early Modern Europe: Historical Lessons for Economic Development.'' In J. Drobak and J. Nye, eds., {\it The Frontiers of the New Institutional Economics}, St. Louis: Academic Press.

\bibitem[Hoffman and Rosenthal(2000)]{Hoffman-Rosenthalb} Hoffman, P. and J.L. Rosenthal (2000). ``Divided We Fall: The Political Economy of Warfare and Taxation.'' Mimeo, California Institute of Technology.

\bibitem[Hsiao(1997)]{Hsiaoa} Hsiao, C. (1997). ``Cointegration and Dynamic Simultaneous Equations Model.'' {\it Econometrica}, 65: 647-70.

\bibitem[Hsiao(2006)]{Hsiaob} Hsiao, C. (2006). ``Cowles Commission Structural Equation Approach in Light of Nonstationary Time Series Analysis.'' In H. Cao, C. Ing, and T. Lai, eds., {\it Time Series and Related Topics}, IMS Lecture Notes - Monograph Series, 52: 173-92.

\bibitem[Im et al.(2003)]{Imetal} Im, K., M. Pesaran, and Y. Shin (2003). ``Testing for Unit Roots in Heterogeneous Panels.'' {\it Journal of Econometrics}, 115: 53-74.

\bibitem[International Monetary Fund(2009)]{IMF-GFS} International Monetary Fund Staff (2009). ``Government Financial Statistics.''

\bibitem[Jaggers and Marshall(2008)]{Jaggers-Marshall} Jaggers, K. and M. Marshall (2008). ``Polity IV Project: Political Regime Characteristics and Transitions, 1800-2007.'' Center for Systematic Peace, George Mason University.

\bibitem[Kang(2002)]{Kang} Kang, D. (2002). {\it Crony Capitalism}. Cambridge, UK: Cambridge University Press.

\bibitem[Karaman and Pamuk(2011)]{Karaman-Pamuk} Karaman, K. and \c{S}. Pamuk (2011). ``Different Paths to the Modern State in Europe: The Interaction Between Domestic Political Economy and Interstate Competition.'' Mimeo, London School of Economics.

\bibitem[Krantz and Sch\"{o}n(2010)]{Krantz-Schon} Krantz, O. and Sch\"{o}n, L. (2010). {\it Swedish Historical National Accounts, 1800-2000}. Department of Economic History, Lund University.

\bibitem[La Porta et al.(1998)]{LaPorta-Lopez} La Porta, R., F. Lopez-de-Silanes, A. Shleifer, and R. Vishny (1998). ``Law and Finance.'' {\it Journal of Political Economy}, 106: 1123-55.

\bibitem[Levi(1988)]{Levi} Levi, M. (1988). {\it Of Rule and Revenue}. Berkeley: University of California Press.

\bibitem[Levin, Lin, and Chu(2002)]{Levinetal} Levin, A., C. Lin, and C. Chu (2002). ``Unit Root Tests in Panel Data: Asymptotic and Finite Sample Properties.'' {\it Journal of Econometrics}, 108: 1-24.

\bibitem[Lindert(2004)]{Lindert} Lindert, P. (2004). {\it Growing Public}. Cambridge, UK: Cambridge University Press.

\bibitem[Maddala and Wu(1999)]{Maddala-Wu} Maddala, G. and S. Wu (1999). ``A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test.'' {\it Oxford Bulletin of Economics and Statistics}, 61: 631-52.

\bibitem[Maddison(2010)]{Maddison} Maddison, A. (2010). ``Statistics on World Population, GDP, and per Capita GDP, 1-2008 AD.'' http://www.ggdc.net/MADDISON

\bibitem[MaCurdy(2007)]{MaCurdy} MaCurdy, T. (2007). ``A Practitioner's Approach to Estimating Intertemporal Relationships Using Longitudinal Data: Lessons from Applications in Wage Dynamics.'' In J. Heckman and E. Leamer, eds., {\it Handbook of Econometrics}, Amsterdam: North Holland.

\bibitem[Magnusson(2009)]{Magnusson} Magnusson, L. (2009). {\it Nation, State, and the Industrial Revolution}. London: Routledge.

\bibitem[Mathias and O'Brien(1976)]{Mathias-OBrien} Mathias, P. and P. O'Brien (1976). ``Taxation in Britain and France, 1715-1810: A Comparison of the Social and Economic Consequences of Taxes Collected by Central Governments.'' {\it Journal of European Economic History}, 5: 601-50.

\bibitem[Mata(1993)]{Mata} Mata, M. (1993). {\it As finan\c{c}as p\'{u}blicas portuguesas da Regenera\c{c}\~{a}o \`{a} Primeira Guerra Mundial}. Lisboa: Banco de Portugal.

\bibitem[Mata and Val\'{e}rio(2001)]{Mata-Valério} Mata, M. and N. Val\'{e}rio (2001). ``As finan\c{c}as constitucionais entre duas guerras civis (1833-1845).'' {\it Revista de Hist\'{o}ria Econ\'{o}mica e Social}, 1: 135-44.

\bibitem[Migdal(1988)]{Migdal} Migdal, J. (1988). {\it Strong Societies and Weak States}. Princeton: Princeton University Press.

\bibitem[Mitchell(1988)]{Mitchella} Mitchell, B. (1988). {\it British Historical Statistics}. Cambridge, UK: Cambridge University Press.

\bibitem[Mitchell(2003)]{Mitchellb} Mitchell, B. (2003). {\it International Historical Statistics: Europe, 1750-2000}. New York: Palgrave Macmillan.

\bibitem[Mokyr(2008)]{Mokyra} Mokyr, J. (2008). ``The Institutional Origins of the Industrial Revolution.'' In E. Helpman, ed., {\it Institutions and Economic Performance}, Cambridge, MA: Harvard University Press.

\bibitem[North(1981)]{North} North, D. (1981). {\it Structure and Change in Economic History}. New York: Norton.

\bibitem[North and Weingast(1989)]{North-Weingast} North, D. and B. Weingast (1989). ``Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England.'' {\it Journal of Economic History}, 49: 803-32.

\bibitem[Nunn(2008)]{Nunna} Nunn, N. (2008). ``The Long Term Effects of Africa's Slave Trades.'' {\it Quarterly Journal of Economics}, 123: 139-76.

\bibitem[Nunn(2009)]{Nunnb} Nunn, N. (2009). ``The Importance of History for Economic Development.'' {\it Annual Review of Economics}, 1: 65-92.

\bibitem[O'Brien(1983)]{OBriena} O'Brien, P. (1983). {\it Railways and the Economic Development of Western Europe, 1830-1914}. New York: St. Martin's Press.

\bibitem[O'Brien(2001)]{OBrienb} O'Brien, P. (2001). ``Fiscal Exceptionalism: Great Britain and its European Rivals, from Civil War to Triumph at Trafalgar and Waterloo.'' Working Paper 65/01, London School of Economics.

\bibitem[O'Brien(2011a)]{OBrienc} O'Brien, P. (2011a). ``The Nature and Historical Evolution of an Exceptional Fiscal State and Its Possible Significant for the Precocious Commercialization and Industrialization of the British Economy from Cromwell to Nelson.'' {\it Economic History Review}, 64: 408-46.

\bibitem[O'Brien(2011b)]{OBriend} O'Brien, P. (2011b). ``The Contributions of Warfare with Revolutionary and Napoleonic France to the Consolidation and Progress of the British Industrial Revolution.'' Working Paper 150/11, London School of Economics.

\bibitem[Pammer(2010)]{Pammer} Pammer, M. (2010). ``Public Finance in Austria-Hungary, 1820-1913.'' In J. Cardoso and P. Lains, eds., {\it Paying for the Liberal State}, Cambridge, UK: Cambridge University Press.

\bibitem[Pedroni(1999)]{Pedronia} Pedroni, P. (1999). ``Critical Values for Cointegration Tests in Heterogeneous Panels with Multiple Regressors.'' {\it Oxford Bulletin of Economics and Statistics}, 61: 653-70.

\bibitem[Pedroni(2004)]{Pedronib} Pedroni, P. (2004). ``Panel Cointegration: Asymptotic and Finite Sample Properties of Pooled Time Series Tests with an Application to the Purchasing Power Parity Hypothesis.'' {\it Econometric Theory}, 20: 597-625.

\bibitem[Persson and Tabellini(2003)]{Persson-Tabellini} Persson, T. and G. Tabellini (2003). {\it The Economic Effects of Constitutions.} Cambridge, MA: MIT Press.

\bibitem[Pesaran(1997)]{Pesaran} Pesaran, M. (1997). ``The Role of Economic Theory in Modeling the Long Run.'' {\it Econometric Journal}, 107: 187-91.

\bibitem[Pesaran et al.(1999)]{Pesaran-Shin} Pesaran, M., Y. Shin, and R. Smith (1999). ``Pooled Mean Group Estimation of Dynamic Heterogeneous Panels.'' {\it Journal of the American Statistical Association}, 94: 621-34.

\bibitem[Pincus(2009)]{Pincus} Pincus, S. (2009). {\it 1688: The First Modern Revolution}. New Haven: Yale University Press.

\bibitem[Prescott(2004)]{Prescott} Prescott, E. (2004). ``Why Do Americans Work So Much More than Europeans?'' {\it Federal Reserve Bank of Minneapolis Quarterly Review}, 28: 2-13.

\bibitem[Przeworski et al.(2000)]{Przeworski-Alvarez} Przeworski, A., M. Alvarez, J. Cheibub, and F. Limongi (2000). {\it Democracy and Development}. Cambridge, UK: Cambridge University Press.

\bibitem[Putterman(2006)]{Puttermanb} Putterman, L. (2006). ``Agricultural Transition Year Country Data Set.'' Mimeo, Brown University.

\bibitem[Putterman(2007)]{Puttermana} Putterman, L. (2007). ``State Antiquity Index, Version 3.'' Mimeo, Brown University.

\bibitem[Putterman and Weil(2010)]{Putterman-Weil} Putterman, L. and D. Weil (2010). ``Post-1500 Population Flows and the Long Run Determinants of Economic Growth and Inequality.'' {\it Quarterly Journal of Economics}, 125: 1627-82.

\bibitem[Rosenthal(1992)]{Rosenthala} Rosenthal, J.L. (1992). {\it The Fruits of Revolution}. Cambridge, UK: Cambridge University Press.

\bibitem[Rosenthal and Wong(2011)]{Rosenthal-Wong} Rosenthal, J.L. and R.B. Wong (2011). {\it Before and Beyond Divergence}. Cambridge, MA: Harvard University Press.

\bibitem[Sch\"{o}n(2010)]{Schon} Sch\"{o}n, L. (2010). ``The Rise of the Fiscal State in Sweden, 1800-1914.'' In J. Cardoso and P. Lains, eds., {\it Paying for the Liberal State}, Cambridge, UK: Cambridge University Press.

\bibitem[Schultz and Weingast(1998)]{Schultz-Weingast} Schultz, K. and B. Weingast (1998). ``Limited Governments, Powerful States.'' In R. Siverson, ed., {\it Strategic Politicians, Institutions, and Foreign Policy}, Ann Arbor: University of Michigan Press.

\bibitem[Singer(1987)]{Singer} Singer, D. (1987). ``Reconstructing the Correlates of War Dataset on Material Capabilities of States, 1816-1985.'' {\it International Interactions}, 14: 115-32.

\bibitem[Stasavage(2005)]{Stasavagea} Stasavage, D. (2005). ``Cities, Constitutions, and Sovereign Borrowing in Europe, 1274-1785.'' {\it International Organization}, 61: 489-526.

\bibitem[Stasavage(2012)]{Stasavageb} Stasavage, D. (2012). ``Oligarchy and Growth.'' Mimeo, New York University.

\bibitem[Silveira(1987)]{Silveira} Silveira, L. (1987). ``Aspectos da evolu\c{c}\~{a}o das finan\c{c}as p\'{u}blicas portuguesas nas primeiras d\'{e}cadas do s\'{e}culo XIX (1800-27).'' {\it An\'{a}lise Social}, 97: 505-29.

\bibitem[Spoerer(2010)]{Spoerer} Spoerer, M. (2010). ``The Evolution of Public Finances in Nineteenth-Century Germany.'' In J. Cardoso and P. Lains, eds., {\it Paying for the Liberal State}, Cambridge, UK: Cambridge University Press.

\bibitem[Tilly(1966)]{RTilly} Tilly, R. (1966). ``The Political Economy of Public Finance and the Industrialization of Prussia, 1815-66.'' {\it Journal of Economic History}, 26: 484-97.

\bibitem[Tilly(1975)]{CTillya} Tilly, C. (1975). {\it The Formation of National States in Western Europe}. Princeton: Princeton University Press.

\bibitem[Tilly(1990)]{CTillyb} Tilly, C. (1990). {\it Coercion, Capital, and European States, 990-1990}. Cambridge, UK: Blackwell.

\bibitem[Ufficio Storico(1980)]{UfficioStorico} Ufficio Storico (1980). ``L'esercito italiano.''

\bibitem[van Zanden(1996)]{vanZandena} van Zanden, J.L. (1996). ``The Development of Government Finances in a Chaotic Period, 1807-50.'' {\it Economic and Social History of the Netherlands}, 7: 53-71.

\bibitem[van Zanden(2009)]{vanZandenb} van Zanden, J.L. (2009). {\it The Long Road to the Industrial Revolution}. Leiden: Brill.

\bibitem[van Zanden and van Riel(2010)]{vanZanden-vanRiel} van Zanden, J.L. and A. van Riel (2010). ``The Development of Public Finance in the Netherlands, 1815-1914.'' In J. Cardoso and P. Lains, eds., {\it Paying for the Liberal State}, Cambridge, UK: Cambridge University Press.

\bibitem[Wade(1990)]{Wade} Wade, R. (1990). {\it Governing the Market}. Princeton: Princeton University Press.

\bibitem[Ziblatt(2006)]{Ziblatt} Ziblatt, D. (2006). {\it Structuring the State}. Princeton: Princeton University Press.