The presence of a state is one of the most reliable historical predictors of social and economic development. In this article, we complete the coding of an extant indicator of state presence from 3500 BCE forward for almost all but the smallest countries of the world today. We outline a theoretical framework where accumulated state experience increases aggregate productivity in individual countries but where newer or relatively inexperienced states can reach a higher productivity maximum by learning from the experience of older states. The predicted pattern of comparative development is tested in an empirical analysis where we introduce our extended state history variable. Our key finding is that the current level of economic development across countries has a hump-shaped relationship with accumulated state history.
Keywords State historyWe are grateful for useful comments from Carl-Johan Dalgaard, Jakob Gerner Hariri, Sascha Becker and four anonymous referees and from seminar participants at University of Copenhagen and Brown University. We also thank Taewan Roh and Nicholas Carter for valuable research assistance.
Electronic supplementary materialThe online version of this article (https://doi.org/10.1007/s10887-017-9152-0) contains supplementary material, which is available to authorized users.