Economic Foundations of the Territorial State System

The contemporary world is organized into a system of territorial states in which rulers exercise authority inside clearly defined boundaries and recognize the authority of other rulers outside those boundaries. We develop a model to explain how the major economic and military developments in Europe...

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Bibliographic Details
Published inAmerican journal of political science Vol. 62; no. 4; pp. 954 - 966
Main Authors Acharya, Avidit, Lee, Alexander
Format Journal Article
LanguageEnglish
Published Oxford Wiley Subscription Services, Inc 01.10.2018
Blackwell Publishing Ltd
Subjects
15th century
Authority
Boundaries
Competition
Economic development
Governance
Tax revenues
Taxation
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ISSN0092-5853
1540-5907
DOI10.1111/ajps.12379

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Summary:The contemporary world is organized into a system of territorial states in which rulers exercise authority inside clearly defined boundaries and recognize the authority of other rulers outside those boundaries. We develop a model to explain how the major economic and military developments in Europe starting in the fifteenth century contributed to the development of this system. Our model rationalizes the system as an economic cartel in which self-interested and forward-looking rulers maintain high tax revenues by reducing competition in the "market for governance."
Bibliography:We are grateful to Scott Abramson, Mark Dincecco, Jim Fearon, Francisco Garfias, Hein Goemans, Steve Krasner, Melissa Lee, Andrew Little, Ken Schultz, David Stasavage, audiences at APSA, Stanford, NYU, the University of Rochester, the Barcelona GSE summer forum, UC‐Irvine, and UCSD‐GPS, and three anonymous referees for valuable feedback. The supplemental appendix is available at
http://stanford.edu/~avidit/statesystem‐si.pdf
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ISSN:0092-5853
1540-5907
DOI:10.1111/ajps.12379