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. 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 12 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

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.