We study how the organization of the state evolves over the process of development of a nation, using a new dataset on the internal organization of the U.S. federal bureaucracy over 1817-1905. First, we show a series of facts, describing how the size of the state, its presence across the territory, and its key organizational
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We study how the organization of the state evolves over the process of development of a nation, using a new dataset on the internal organization of the U.S. federal bureaucracy over 1817-1905. First, we show a series of facts, describing how the size of the state, its presence across the territory, and its key organizational features evolved over the nineteenth century. Second, exploiting the staggered expansion of the railroad and telegraph networks across space, we show that the ability of politicians to monitor state agents throughout the territory is an important driver of these facts: locations with lower transportation and communication costs with Washington DC have more state presence, are delegated more decision power, and have lower employee turnover. The results suggest that high monitoring costs are associated with small, personalistic state organizations based on networks of trust; technological shocks lowering monitoring costs facilitate the emergence of modern bureaucratic states.
That is from a new NBER working paper by Nicola Mastrorocco and Edoardo Teso.
Every now and then Bryan Caplan writes a short essay (and here), dumping on the idea of state capacity, suggesting instead the alternative of “state priorities,” but I don’t think his argument is coherent. I think of state priorities as the demand side, and state capacity as the supply side. Of course both matter. Sometimes, in a partial equilibrium setting, state priorities will seem to be the only thing that matters. For instance, when the I-95 bridge collapsed outside of Philadelphia, it was repaired very quickly, in part because the governor made repair a priority. Enough resources were at hand, including enough legal resources to manage the changes in procedure. Most systems have some amount of slack. But when America tries to upgrade its infrastructure more generally, it is limited by both the supply side and the demand side, or in other words state capacity really matters. It’s not just that we don’t have a Mars colony, we don’t have enough lawyers and bureaucrats to lawfully repeal a large number of regulations at once.
Political Science, Uncategorized