Working Paper: CEPR ID: DP13719
Authors: Matteo Cervellati; Sara Lazzaroni; Giovanni Prarolo; Paolo Vanin
Abstract: We provide a theory and empirical evidence on the evolution of the state system in pre-industrial Europe. We study sovereign polities with a fiscal, regulatory and military capacity that is imperfect and declining in space. Ruling elites make strategic non-cooperative investments in state capacity to maximize rents. The resulting territorial competition shapes the equilibrium evolution of the state system. Increasing productive potential imply changes in the type, size and number of polities and impact the distribution of economic activity across space. We assemble geo-referenced yearly data on all sovereign polities ruling over Europe 1000-1800. We document highly non-monotonic patterns of (dis)aggregation of political geography and transition phases with spikes in wars prior to the emergence of modern territorial countries. Estimates of the impact of political geography on local (city) growth document a changing role of type and size of polities and a reversal of the role of centrality within polities.
Keywords: state systems; productive potentials; preindustrial europe; noncooperative equilibria; territorial competition; wars; georeferenced data
JEL Codes: N00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Ruling elites' investments in state capacity (O17) | Territorial competition (H73) |
| Territorial competition (H73) | Evolution of state systems (P16) |
| State capacity declines with distance from the capital (H77) | Taxation and public good provision (H49) |
| Thresholds of productivity (D24) | Emergence of city states (N93) |
| Emergence of city states (N93) | Shift in governance structures (H10) |
| Wars (D74) | Territorial control (P26) |