State-Building in Historical Political Economy

Abstract

Under what conditions do strong states under a centralized political authority emerge? This chapter presents a theoretical framework that summarizes and synthesizes insights from recent research in historical political economy on state building. The chapter examines the decision of a central authority who weighs the costs and benefits of state building by taxing the population to defend against a threat. The analysis illustrates prominent arguments in the literature, including the role of external conflict, military technology, nontax revenue, societal wealth, the technology of taxation, and fiscal legibility in state building. The chapter then considers how powerful local elites, whose interests may not align with the central authority, can shift a ruler’s willingness and ability to centralize power, drawing a connection with the literatures on intra-elite conflict and limited government. Finally, the chapter expands the framework to incorporate non-elite citizens, who can pressure elites and central authorities through the threat of rebellion from below, to discuss the role of elite-mass relations in state building.