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State capacity and public goods: institutional change, human capital and growth in early modern Germany

Author

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  • Jeremiah Dittmar
  • Ralph R. Meisenzahl
Abstract
What are the origins and consequences of the state as a provider of public goods? We study legal reforms that established mass public education and increased state capacity in German cities during the 1500s. These fundamental changes in public goods provision occurred where ideological competition during the Protestant Reformation interacted with popular politics at the local level. We document that cities that formalized public goods provision in the 1500s began differentially producing and attracting upper tail human capital and grew to be significantly larger in the long-run. We study plague outbreaks in a narrow time period as exogenous shocks to local politics and find support for a causal interpretation of the relationship between public goods institutions, human capital, and growth. More broadly, we provide evidence on the origins of state capacity directly targeting welfare improvement.

Suggested Citation

  • Jeremiah Dittmar & Ralph R. Meisenzahl, 2016. "State capacity and public goods: institutional change, human capital and growth in early modern Germany," CEP Discussion Papers dp1418, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1418
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Davide Cantoni & Jeremiah Dittmar & Noam Yuchtman, 2017. "Reallocation and secularization: the economic consequences of the protestant reformation," CEP Discussion Papers dp1483, Centre for Economic Performance, LSE.
    2. Edwards, Jeremy, 2018. "A replication of "Education and catch-up in the industrial revolution" (American Economic Journal: Macroeconomics, 2011)," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 12, pages 1-33.
    3. Lecce, Giampaolo & Ogliari, Laura, 2019. "Institutional Transplant and Cultural Proximity: Evidence from Nineteenth-Century Prussia," The Journal of Economic History, Cambridge University Press, vol. 79(4), pages 1060-1093, December.
    4. Becker, Sascha O. & Pfaff, Steven & Rubin, Jared, 2016. "Causes and consequences of the Protestant Reformation," Explorations in Economic History, Elsevier, vol. 62(C), pages 1-25.
    5. Mario F Carillo, 2021. "Agricultural Policy and Long-Run Development: Evidence from Mussolini's Battle for Grain," The Economic Journal, Royal Economic Society, vol. 131(634), pages 566-597.
    6. Robert Stelter & David de la Croix & Mikko Myrskylä, 2020. "Leaders And Laggards In Life Expectancy Among European Scholars From The Sixteenth To The Early Twentieth Century," LIDAM Discussion Papers IRES 2020024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    7. Evans, Olaniyi, 2022. "The criticality of institutions and the macroeconomy for education outcomes in Africa," MPRA Paper 118197, University Library of Munich, Germany.
    8. Cantoni, Davide & Yuchtman, Noam & Dittmar, Jeremiah, 2016. "Reformation and Reallocation: Religious and Secular Economic Activity in Early Modern Germany," CEPR Discussion Papers 11655, C.E.P.R. Discussion Papers.
    9. Stefano Comino & Alberto Galasso & Clara Graziano, 2017. "The Diffusion of New Institutions: Evidence from Renaissance Venice's Patent System," NBER Working Papers 24118, National Bureau of Economic Research, Inc.
    10. Davide Cantoni & Jeremiah Dittmar & Noam Yuchtman, 2018. "Religious Competition and Reallocation: the Political Economy of Secularization in the Protestant Reformation," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 133(4), pages 2037-2096.
    11. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    12. Michel Serafinelli & Guido Tabellini, 2022. "Creativity over time and space," Journal of Economic Growth, Springer, vol. 27(1), pages 1-43, March.
    13. Jean-Paul Carvalho & Mark Koyama & Michael Sacks, 2017. "Education, identity, and community: lessons from Jewish emancipation," Public Choice, Springer, vol. 171(1), pages 119-143, April.
    14. Harwick, Cameron, 2018. "Money and its institutional substitutes: the role of exchange institutions in human cooperation," Journal of Institutional Economics, Cambridge University Press, vol. 14(4), pages 689-714, August.
    15. Ennio E. Piano, 2019. "State capacity and public choice: a critical survey," Public Choice, Springer, vol. 178(1), pages 289-309, January.

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    More about this item

    Keywords

    State Capacity; Institutions; Growth; Education; Human Capital; Persistence;
    All these keywords.

    JEL classification:

    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development
    • N13 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: Pre-1913
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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