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State Capacity and Military Conflict

Author

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  • Voth, Hans-Joachim
  • Gennaioli, Nicola
Abstract
In 1500, Europe was composed of hundreds of statelets and principalities, with weak central authority, no monopoly over the legitimate use of violence, and multiple, overlapping levels of jurisdiction. By 1800, Europe had consolidated into a handful of powerful, centralized nation states. We build a model that simultaneously explains both the emergence of capable states and growing divergence between European powers. In our model, the impact of war on the European state system depends on: i) the importance of money for determining the war outcome (which stands for the cost of war), and ii) a country's initial level of domestic political fragmentation. We emphasize the role of the 'Military Revolution', which raised the cost of war. Initially, this caused more internally cohesive states to invest more in state capacity, while other (more divided) states rationally dropped out of the competition. This mechanism leads to both increasing divergence between European states, and greater average investments in state building on the continent overall.

Suggested Citation

  • Voth, Hans-Joachim & Gennaioli, Nicola, 2011. "State Capacity and Military Conflict," CEPR Discussion Papers 8699, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:8699
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    More about this item

    Keywords

    Ethnicity; Fragmentation; Military conflict; State capacity; Taxation; War;
    All these keywords.

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • H4 - Public Economics - - Publicly Provided Goods
    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913

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