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Warfare, Fiscal Capacity, and Performance

Dincecco, Mark and Prado, Mauricio Warfare, Fiscal Capacity, and Performance. Journal of Economic Growth, 17 (3). pp. 171-203. ISSN 1381-4338 (2012)

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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.

Item Type: Article
Identification Number: 10.1007/s10887-012-9079-4
Uncontrolled Keywords: JEL Classification: C20; H10; O10; N40; Keywords: Pre-modern wars, Fiscal capacity, Public services, Worker productivity
Subjects: H Social Sciences > HA Statistics
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
J Political Science > JF Political institutions (General)
Research Area: Economics and Institutional Change
Depositing User: Users 18 not found.
Date Deposited: 13 Mar 2012 12:56
Last Modified: 05 Sep 2012 15:37
URI: http://eprints.imtlucca.it/id/eprint/1233

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