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State capacity and military conflict


Gennaioli, Nicola; Voth, Hans-Joachim (2015). State capacity and military conflict. Review of Economic Studies, 82(4):1409-1448.

Abstract

Powerful, centralized states controlling a large share of national income only begin to appear in Europe after 1500. We build a model that explains their emergence in response to the increasing importance of money for military success. When fiscal resources are not crucial for winning wars, the threat of external conflict stifles state-building. As finance becomes critical, internally cohesive states invest in state capacity while divided states rationally drop out of the competition, causing divergence. We emphasize the role of the “Military Revolution”, a sequence of technological innovations that transformed armed conflict. Using data from 374 battles, we investigate empirically both the importance of money for military success and patterns of state-building in early modern Europe. The evidence is consistent with the predictions of our model.

Abstract

Powerful, centralized states controlling a large share of national income only begin to appear in Europe after 1500. We build a model that explains their emergence in response to the increasing importance of money for military success. When fiscal resources are not crucial for winning wars, the threat of external conflict stifles state-building. As finance becomes critical, internally cohesive states invest in state capacity while divided states rationally drop out of the competition, causing divergence. We emphasize the role of the “Military Revolution”, a sequence of technological innovations that transformed armed conflict. Using data from 374 battles, we investigate empirically both the importance of money for military success and patterns of state-building in early modern Europe. The evidence is consistent with the predictions of our model.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:03 Faculty of Economics > Department of Economics
Dewey Decimal Classification:330 Economics
Uncontrolled Keywords:State capacity, taxation, military conflict, fiscal resources, military revolution, war, centralization
Language:English
Date:October 2015
Deposited On:09 Oct 2015 15:49
Last Modified:08 Dec 2017 14:15
Publisher:Oxford University Press
ISSN:0034-6527
Additional Information:This is a pre-copyedited, author-produced PDF of an article accepted for publication in the Review of Economic Studies following peer review. The definitive publisher-authenticated version [Nicola Gennaioli and Hans-Joachim Voth State Capacity and Military Conflict Review of Economic Studies (2015) 82 (4): 1409-1448 first published online May 29, 2015 doi:10.1093/restud/rdv019 ] is available online at: http://restud.oxfordjournals.org/content/82/4/1409.
Publisher DOI:https://doi.org/10.1093/restud/rdv019

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