The Origins of State Capacity: Property Rights, Taxation, and Politics
Open accessAbstract
Economists generally assume that the state has sufficient institutional capacity to support markets and levy taxes. This paper develops a framework where “policy choices” in market regulation and taxation are constrained by past investments in legal and fiscal capacity. It studies the economic and political determinants of such investments, demonstrating that legal and fiscal capacity are typically complements. The results show that, among other things, common interest public goods, such as fighting external wars, as well as political stability and inclusive political institutions, are conducive to building state capacity. Some correlations in cross-country data are consistent with the theory. (JEL D72, E62, H11, H20, P14)
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Integrity signals
Registry
Cites
Statistics
Claims the paper makes
The claims and statistics of this paper haven’t been checked yet.
Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.
Self-check
Percentages, sums and reported differences re-computed from the paper’s own numbers.
The self-check needs the paper’s full text.
Cites
La Porta, R., Lopez‐de‐Silanes, F., Shleifer, A., & Vishny, R. W. (1998) · Journal of Political Economy · doi:10.1086/250042 · Cited by 18,025 · see citing works
Flagged first, then by citations
Cited by
Sorted by citations
Why Do Developing Countries Tax So Little?
Besley, T., & Persson, T. (2014) · Journal of Economic Perspectives · doi:10.1257/jep.28.4.99 · Cited by 819 · see citing works
Self-citationMedieval Universities, Legal Institutions, and the Commercial Revolution *
Cantoni, D., & Yuchtman, N. (2014) · The Quarterly Journal of Economics · doi:10.1093/qje/qju007 · Cited by 221 · see citing works
The Causes and Consequences of Development Clusters: State Capacity, Peace, and Income*
Besley, T., & Persson, T. (2014) · Annual Review of Economics · doi:10.1146/annurev-economics-080213-041128 · Cited by 104 · see citing works
Self-citationBureaucratic Competence and Procurement Outcomes
Decarolis, F., Giuffrida, L., Iossa, E., Mollisi, V., & Spagnolo, G. (2018) · doi:10.3386/w24201 · Cited by 88 · see citing works
Growth, history, or institutions
Bertocchi, G., & Guerzoni, A. (2012) · Journal of Peace Research · doi:10.1177/0022343312452420 · Cited by 85 · see citing works
Violent conflicts and state capacity: Evidence from Sub-Saharan Africa
Babajide, A., Ahmad, A. H., & Coleman, S. (2021) · Journal of Government and Economics · doi:10.1016/j.jge.2021.100019 · Cited by 34 · see citing works
The arsenal of democracy: Production and politics during WWII
Rhode, P. W., Snyder, Jr., & Strumpf, K. (2018) · Journal of Public Economics · doi:10.1016/j.jpubeco.2018.08.010 · Cited by 14 · see citing works
ROY, T. (2013) · Modern Asian Studies · doi:10.1017/s0026749x11000825 · Cited by 4 · see citing works
- Authors
- Besley, T., & Persson, T.
- Affiliations
- London School of Economics and Political Science (GB)
- Stockholm University (SE)
- Venue
- American Economic Review
- Publisher
- American Economic Association
- Published
- 2009-08-01
- Volume
- 99
- Issue
- 4
- Pages
- 1218-1244
- ISSN
- 0002-8282 (ISSN-L)
- OpenAlex
- W2789051288
- Cited by
- 1,637
- References
- 1
- Citations by year
- 2026: 142 · 2025: 168 · 2024: 107 · 2023: 151 · 2022: 133 · 2021: 101 · 2020: 103 · 2019: 78 · 2018: 92 · 2017: 69 · 2016: 77 · 2015: 58 · 2014: 91 · 2013: 99 · 2012: 54
- FWCI
- 120.05
- Type
- journal article
- Language
- en
- Open access
- bronze
- doi.org
- Locations
- American Economic Review (publishedVersion)
- London School of Economics and Political Science Research Online (London School of Economics and Political Science) (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- London School of Economics and Political Science Theses Online (London School of Economics and Political Science) (submittedVersion)
- Funders
- Canadian Institute for Advanced Research
- Vetenskapsrådet
- Economic and Social Research Council (ES/D002761/1)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Fiscal Policies and Political Economy
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic Theory and Institutions
- Social Sciences › Demography › Culture, Economy, and Development Studies
- Keywords
- state capacity, property rights, taxation, legal capacity, fiscal capacity, market regulation, war, political stability, institutional complementarity, cross-country determinants
About these checks
Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.
Statistics and arithmetic are recomputed, not judged.
Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.
What counts as a claim ›How we measure confidence ›How we check this ›
Are you an author, or do you see a problem with this page? Request a review
