Different Paths to the Modern State in Europe: The Interaction between Domestic Political Economy and Interstate Competition

52 Pages Posted: 30 May 2011

Date Written: May 30, 2011

Abstract

Theoretical work on state formation and capacity has focused mostly on early modern Europe and on the experience of western European states during this period. While a number of European states monopolized domestic tax collection and achieved gains in state capacity during the early modern era, for others revenues stagnated or even declined, and these variations motivated alternative hypotheses for determinants of fiscal and state capacity. In this study we test the basic hypotheses in the existing literature making use of the large date set we have compiled for all of the leading states across the continent. We find strong empirical support for two prevailing threads in the literature, arguing respectively that interstate wars and changes in economic structure towards an urbanized economy had positive fiscal impact. Regarding the main point of contention in the theoretical literature, whether it was representative or authoritarian political regimes that facilitated the gains in fiscal capacity, we do not find conclusive evidence that one performed better than the other. Instead, the empirical evidence we have gathered lends supports to the hypothesis that when under pressure of war, the fiscal performance of representative regimes was better in the more urbanized-commercial economies and the fiscal performance of authoritarian regimes was better in rural-agrarian economies.

JEL Classification: Z00

Suggested Citation

Karaman, K. Kıvanç and Pamuk, Sevket, Different Paths to the Modern State in Europe: The Interaction between Domestic Political Economy and Interstate Competition (May 30, 2011). LEQS Paper No. 37, Available at SSRN: https://ssrn.com/abstract=1855668 or http://dx.doi.org/10.2139/ssrn.1855668

K. Kıvanç Karaman (Contact Author)

Bogazici University ( email )

Bebek, İstanbul 34342
Turkey

Sevket Pamuk

Bogazici University ( email )

Bebek, İstanbul 34342
Turkey

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