State capacity and economic development: Causal mechanism or correlative filter?

Geloso, Vincent; Salter, Alexander William

doi:10.1016/j.jebo.2019.12.015

Cited by 58 publications

(13 citation statements)

References 87 publications

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“…This includes the view that military capacity explains the prosperity of the West (Dincecco & Onorato, 2017 ). However, as Geloso and Salter ( 2020 ) show, increasing state capacity occurred historically in response to the need to protect wealth from predatory competitors; thus, wealth creation contributes to state capacity. Accordingly, economic freedom is likely to contribute to wealth and, by giving rise to state capacity, improve the ability to fight disease on two margins: through the wealth effect and through the state-capacity effect, which influences the ability to provide public goods.…”

Section: Discussionmentioning

confidence: 99%

“…2 As Leeson and Thompson ( 2021 ) point out, many public health interventions involve the ability of governments to reallocate important quantities of resources towards (or away from) certain ends. The ability to perform this reallocation requires a strong state which is why Geloso and Salter ( 2020 ) point out that there are several examples of authoritarian regimes 3 that are able expend considerable efforts–in comparison with market-oriented liberal democracies–by disregarding political rights and economic freedoms. Murray et al ( 2013 ) point to similar evidence when they show that countries with high levels of pathogens prevalence tends to be associated with more authoritarian regimes.…”

Section: Introductionmentioning

confidence: 99%

“…They point to the examples of the former Communist bloc countries as well as Cuba and Ethiopia which achieved high-level health outcomes given their per capita income levels. It should also be noticed thatGeloso et al (2020) do not argue that health outcomes are better under dictatorships, merely that such regimes have more ability to forcibly reallocate resources to health services.4 The index is a composite measure of workplace closures, cancellation of public events, restrictions on public gatherings, closures of public transport; stay-at-home requirements; public information campaigns; restrictions on internal movements; and international travel controls. 5 Further complexifying the nature of the trade-off is that economic freedom is associated with the ability to make consumption choices that may be detrimental to health outcomes.…”

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confidence: 99%

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Pandemics, economic freedom, and institutional trade-offs

Geloso

2021

Eur J Law Econ

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We argue that institutions are bundles that involve trade-offs in the government's ability to provide public goods that affect public health. We hypothesize that the institutions underlying economic freedom affect the mix of diseases by reducing diseases of poverty relative to diseases of commerce (those associated with free movement of people, such as smallpox or COVID-19). We focus on smallpox and typhoid fever in the late nineteenth century and early twentieth century in order to build on recent work that make arguments similar to ours, especially the framework Werner Troesken sets forth in The Pox of Liberty. Our evidence shows that economic freedom, in multiple periods of time and settings prior to the eradication of smallpox in the second half of the twentieth century, reduced typhoid mortality but had no effect on smallpox deaths. The implication for COVID-19 is that the trade-off between fighting the pandemic and preserving economic freedom may not be too severe in the short run. However, in the long run, the wealth benefits from economic freedom are likely to be crucial in reducing vulnerability to diseases of commerce primarily from their impact on comorbidities (such as diabetes and heart disease). Thus, economic freedom is on balance good for public health, which suggests that it, while requiring trade-offs, might be the best institutional bundle for dealing with pandemics.

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Section: Discussionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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confidence: 99%

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Pandemics, economic freedom, and institutional trade-offs

Geloso

2021

Eur J Law Econ

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“…The property institutions literature has broadly identified the systemic characteristics that give economic actors sufficient certainty to engage in costly development 5 . One important characteristic is sufficient military capacity to secure property against outsiders (Batchelder and Freudenberger, 1983; Geloso and Salter, 2020); administrative and enforcement capacity to define and enforce property institutions for those who want them (Arruñada and Garoupa, 2005); and political constraints to ensure the government's promises to respect property institutions are credible (Boettke and Candela, 2020; Candela, 2020). Furthermore, the development of property institutions requires that political decision-makers are residual claimants with at least some incentive to protect property (Leeson and Harris, 2018; McChesney, 1990).…”

Section: The Political Economy Of State Predation and The Evolution Of Property Institutionsmentioning

confidence: 99%

The chronic uncertainty of American Indian property rights

Alston

Crepelle

Law

et al. 2021

Journal of Institutional Economics

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Property institutions should ideally provide economic actors with certainty that their local choices about investment will not be unsettled by shifting political economic equilibria. We argue that for this to occur, political autonomy, administrative and enforcement capacity, political constraints, and accessible legal institutions are each necessary. A comparison of the evolution of property rights for settlers and American Indians in the United States shows how political and legal forces shape the evolution of property institutions. American Indians, who had property institutions before Europeans arrived, could not defend their land from Europeans and later Americans due to lacking military capacity. Settlers' property rights were relatively secure because the government had sufficient autonomy and capacity to broadly define and enforce their rights, political institutions constrained the government from expropriating settlers' property, and legal institutions provided a forum for settlers to adjudicate and defend their rights in court. Native Americans, in contrast, had systematically inconsistent and often expropriative policy treatment by the government. Although tribes have technically been sovereign since the 1970s, tribal governments continue to lack sufficient political and legal autonomy and capacity to define and enforce property institutions in response to evolving local conditions.

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“…If a prince's neighbors are all building ‘fiscal-military’ states, that prince cannot help but follow along, so long as he wishes to remain independent (cf. Geloso and Salter, 2020; Hendrickson et al ., 2018).…”

Section: German Cameralismmentioning

confidence: 99%

The fundamental Coase of development: property rights foundations of the effective state

Piano

Salter

2020

Journal of Institutional Economics

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This paper identifies political property rights and jurisdictional rivalry as two important mechanisms that drive political and economic development. After developing a general framework to explain relative performance in the ‘market for governance’, we argue that Western Europe during the High Middle Ages presented initial conditions conducive to the development of effective states. We extend the framework by analyzing city-state governance in Renaissance Italy, as well as public finance practices in early modern Germany. We conclude by discussing the implications of our argument for the literature on state capacity and economic development. The takeaway is that well-aligned political property rights and competition in the provision of governance services can promote the protective and productive state while forestalling the predatory state.

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State capacity and economic development: Causal mechanism or correlative filter?

Cited by 58 publications

References 87 publications

Pandemics, economic freedom, and institutional trade-offs

Pandemics, economic freedom, and institutional trade-offs

The chronic uncertainty of American Indian property rights

The fundamental Coase of development: property rights foundations of the effective state

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