Change search
ReferencesLink to record
Permanent link

Direct link
The origins of state capacity: Property rights, taxation and policy
Stockholm University, Faculty of Social Sciences, Institute for International Economic Studies.
London School of Economics.
2009 (English)In: The American Economic Review, ISSN 0002-8282, E-ISSN 1944-7981, Vol. 99, no 4, 1218-1244 p.Article in journal (Refereed) Published
Abstract [en]

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.

Place, publisher, year, edition, pages
2009. Vol. 99, no 4, 1218-1244 p.
Keyword [en]
Models of Political Processes, Rent-seeking, Elections, Legislatures, Voting Behavior, Fiscal Policy
National Category
Research subject
URN: urn:nbn:se:su:diva-36024DOI: 10.1257/aer.99.4.1218ISI: 000270480500006OAI: diva2:288597
Available from: 2010-01-21 Created: 2010-01-21 Last updated: 2013-01-28Bibliographically approved

Open Access in DiVA

No full text

Other links

Publisher's full text

Search in DiVA

By author/editor
Persson, TorstenBesley, Timothy
By organisation
Institute for International Economic Studies
In the same journal
The American Economic Review

Search outside of DiVA

GoogleGoogle Scholar
The number of downloads is the sum of all downloads of full texts. It may include eg previous versions that are now no longer available

Altmetric score

Total: 137 hits
ReferencesLink to record
Permanent link

Direct link