Working Paper: CEPR ID: DP17103
Authors: Gerda Asmus; Raphael Franck
Abstract: This study analyzes how state capacity shapes the local impact of national policies by exploiting a quasi-natural experiment in the regional expansion of the state. It uses the local discontinuity created by the boundary of the largest peasant rebellion in 18th century Russia where the state increased security forces and levied taxes more efficiently after the uprising ended. The results show that increased state capacity had limited effects on economic growth until the central government targeted specific development objectives. Namely, when rulers chose to build schools or foster industrialization, their national policies benefited areas which already had strong state capacity.
Keywords: Economic Growth; Public Policies; Russia; State Capacity
JEL Codes: O11; O43; N13; N14
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased state capacity (H19) | Local economic development (O29) |
| State expansion (H79) | Local governance capacity (H70) |
| Increased state presence (H79) | Local security and administrative capacity (F52) |
| Initial increase in state capacity (H19) | Economic growth (O49) |
| State capacity (H11) | Human capital formation (J24) |
| Historical state capacity (H11) | Industrial decline of the southern Urals (L61) |
| State capacity (H11) | Public infrastructure (H54) |