Warfare, Fiscal Capacity, and Performance

Mark Dincecco, Mauricio Prado

Research output: Contribution to journalJournal articleResearchpeer-review

Abstract

We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples.
We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples.
LanguageEnglish
JournalJournal of Economic Growth
Volume17
Issue number3
Pages171–203
Number of pages33
ISSN1381-4338
DOIs
StatePublished - 2012

Keywords

  • Pre-Modern Wars
  • Fiscal Capacity
  • Public Services
  • Worker Productivity

Cite this

Dincecco, Mark ; Prado, Mauricio. / Warfare, Fiscal Capacity, and Performance. In: Journal of Economic Growth. 2012 ; Vol. 17, No. 3. pp. 171–203
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Warfare, Fiscal Capacity, and Performance. / Dincecco, Mark; Prado, Mauricio.

In: Journal of Economic Growth, Vol. 17, No. 3, 2012, p. 171–203.

Research output: Contribution to journalJournal articleResearchpeer-review

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AB - We exploit differences in casualties sustained in pre-modern wars to estimate the impact of fiscal capacity on economic performance. In the past, states fought different amounts of external conflicts, of various lengths and magnitudes. To raise the revenues to wage wars, states made fiscal innovations, which persisted and helped to shape current fiscal institutions. Economic historians claim that greater fiscal capacity was the key long-run institutional change brought about by historical conflicts. Using casualties sustained in pre-modern wars to instrument for current fiscal institutions, we estimate substantial impacts of fiscal capacity on GDP per worker. The results are robust to a broad range of specifications, controls, and sub-samples.

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