State Capacity in Historical Political Economy

Abstract

This chapter evaluates state capacity from a long-run historical perspective. We discuss how to define and measure state capacity. We explain how the establishment of a high-capacity state can enhance domestic peace, improve material prosperity, and promote more pluralistic norms. We describe which factors have obstructed the historical development of high-capacity states. Finally, we characterize ways in which society can harness the various public goods that a capable state can provide, while reducing its potential to act despotically.

Keywords: political order, public goods, economic development, state-society relations, pluralism, despotism, history

JEL Classification: H11, H2, H4, N40, O10, P48