Working Paper: CEPR ID: DP18326
Authors: Leonor F. Costa; António Henriques; Nuno Palma
Abstract: We provide a blueprint for constructing measures of state capacity in premodern states, offering several advantages over the current state of the art. We argue that assessing changing state capacity requires considering the composition of revenues, expenditure patterns, and local-level budgets. As an application, we examine the case of Portugal (1367-1844). Our findings demonstrate that throughout most of this extended period, Portugal maintained comparatively high fiscal and legal capacities. This challenges claims that Portugal’s economic decline from the second half of the eighteenth century was due to low state capacity.
Keywords: state capacity; fiscal capacity; premodern; economic growth; Portugal
JEL Codes: H20; N43; O23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| state capacity (H11) | economic performance (P17) |
| fiscal capacity (E62) | economic performance (P17) |
| expenditure patterns (H50) | state capacity (H11) |
| local governments (H70) | state capacity (H11) |
| reliance on colonial revenues (F54) | state capacity (H11) |