By the end of the medieval era, three new competing institutions attempted to capture gains from trade and reduce feudal particularism: sovereign territorial states, cityleagues, and city-states. By the middle of the seventeenth century, city-leagues and city-states had declined markedly. Territorial states survived as the dominant form because they were able to reduce free riding, lower transaction costs, and credibly commit their constituents. The selection process took place along three dimensions. First, sovereign territorial states proved competitively superior in the economic realm. Second, states increasingly recognized only other sovereign territorial states as legitimate actors in the international system. Third, other actors defected to or copied the institutional makeup of sovereign territorial organization. The emergence of discrete territorial units in which only sovereign authorities represented their citizens as the predominant type of organization in international affairs created a new solution to the problem of markets and hierarchies.
Some contemporary states seem subject to aggregational dynamics that bring them together in larger regional associations, whereas others fall prey to centrifugal forces that pull them apart. The autonomy of all states has been drawn into question by the globalization of trade and finance. For these reasons, scholars have returned to examining the historical origins and development of the modern state in the hope that this may shed light on its future, and on the process through which new logics of organization may be emerging that might displace the state. This essay discusses various accounts of the emergence and development of the modern state, comparing security, economic, and institutionalist approaches. It then links these approaches to insights regarding contemporary statehood. Arguments regarding the autonomy of the state must be distinguished from discussions of territorial sovereignty as a constitutive principle of international relations. The latter, juridical notion of sovereignty as a regulative device in international relations has retained its influence, even if the autonomy of the state has declined.
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