, and two anonymous referees for helpful comments and suggestions. Acemoglu gratefully acknowledges financial support from the National Science Foundation. Ticchi acknowledges financial support from the Ministero dell'Istruzione, dell'Università e della Ricerca. Much of the work on this paper was done when Acemoglu and Vindigni were visiting Yale and Collegio Carlo Alberto. They thank the economics department and the Leitner Program in International Political Economy at Yale and Collegio Carlo Alberto for their hospitality.

Inefficiencies in the bureaucratic organization of the state are often viewed as important factors in retarding economic development. Why certain societies choose or end up with such inefficient organizations has received very little attention, however. In this paper, we present a simple theory of the emergence and persistence of inefficient states. The society consists of rich and poor individuals. The rich are initially in power, but expect to transition to democracy, which will choose redistributive policies. Taxation requires the employment of bureaucrats. We show that, under certain circumstances, by choosing an inefficient state structure, the rich may be able to use patronage and capture democratic politics. This enables them to reduce the amount of redistribution and public good provision in democracy. Moreover, the inefficient state creates its own constituency and tends to persist over time. Intuitively, an inefficient state structure creates more rents for bureaucrats than would an efficient state structure. When the poor come to power in democracy, they will reform the structure of the state to make it more efficient so that higher taxes can be collected at lower cost and with lower rents for bureaucrats. Anticipating this, when the society starts out with an inefficient organization of the state, bureaucrats support the rich, who set lower taxes but also provide rents to bureaucrats. We show that in order to generate enough political support, the coalition of the rich and bureaucrats may not only choose an inefficient organization of the state, but they may further expand the size of bureaucracy so as to gain additional votes. The model shows that an equilibrium with an inefficient state is more likely to arise when there is greater inequality between the rich and the poor, when bureaucratic rents take intermediate values and when individuals are sufficiently forward-looking.

In earlier work we identified a robust negative association between religiosity and patents per capita, holding across countries as well as US states. In this paper we relate 11 indicators of individual openness to innovation (e.g., attitudes toward science and technology, new versus old ideas, change, risk taking, agency, imagination, and independence in children) to 5 measures of religiosity, including beliefs and attendance. We use five waves of the World Values Survey and control for sociodemographics, country and year fixed effects. Across the 52 regressions, greater religiosity is almost uniformly associated to less favorable views of innovation, with high significance.