Theories of the State

4 August 2006 at 11:04 am 1 comment

| Richard Langlois |

I was interested to see Peter’s post about the agency theory of the state — and glad to have the reference.  I was actually just about to write about something related.

One of my favorite courses to teach is European Economic History.  When I talk about the origin and development of the state, I rely on Meir Kohn’s distinction between territorial government and associational government. Territorial governments are the predatory states of Douglass North and Mancur Olson;  associational governments arose in the interstices of territorial ones, typically as guilds of guilds in medieval cities, for the purpose of providing public (club) goods.  Associational governments had existed in places like Athens and Rome, of course, again as clubs of wealthy merchants and land owners to provide public goods.  But the interesting story is how territorial governments came to take on associational features — so that they could also be “owned” by their citizens — while, as we and Rozeff would agree, they retained a predatory dimension because of agency costs. 

Meir Kohn is an interesting economist at Dartmouth whom I met a couple of years ago when we were involved in one of Axel Leijonhufvud’s summer schools in Trento.  He is writing a textbook on European economic history, which is available online in manuscript.  The aspect I was originally going to write about is Meir’s interesting claim that war was a far more important restraint on economic growth than Malthusian population factors in the pre-modern period.  He proposes a cyclical account: the monarch taxes the population to finance war, which, along with the physical devastation of the war, reduces the population to subsistence; war eventually exhausts the treasury, forcing the monarch to wage peace for a while; this allows economic growth to spring up again, which leads to another round of taxation and war.  Bob Higgs has written in the American context about the negative effects of war on growth.  Does anyone know of anyone else who’s talked about this in the European context?  This strikes me as a fertile area for cliometricians. 

Entry filed under: - Langlois -, Former Guest Bloggers, Institutions, Recommended Reading, Teaching.

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1 Comment Add your own

  • 1. Tomas  |  8 August 2006 at 9:23 pm

    I have to say that the Higgs article is one of my favorites in economic history. Every time someone starts talking about how WWII brought us out of the Great Depression, I can’t but help throw out 3 or 4 of his arguments.

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