This is Mark Lutter's Typepad Profile.
Join Typepad and start following Mark Lutter's activity
Join Now!
Already a member? Sign In
Mark Lutter
Recent Activity
I don't think state capacity and competition between states are mutually exclusive. During the middle ages there existed growth inhibiting organizations and institutions other than the state, guilds for example. State capacity essentially ensured sufficient power to stop local barriers to trade. Another aspect in which state capacity could lead to economic growth requires thinking about optimal tax theory. Certain types of taxation inhibit growth more than others. Increasing state capacity allowed the state to collect taxes using distortionary mechanisms.
To make the claim of institutional efficiency meaningful, it must be a pattern prediction, not a point prediction. However, given the example of North and South Korea, not to mention China and Taiwan, and Singapore, such a pattern prediction does not seem to hold. While I agree a countries institutional opportunities set is constrained, there seems to be a very real possibility of multiple equilibria.
Mark Lutter is now following The Typepad Team
Apr 23, 2013