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Economic Foundations of the Territorial State System

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  • Avidit Acharya
  • Alexander Lee

Abstract

The contemporary world is organized into a system of territorial states in which rulers exercise authority inside clearly defined boundaries and recognize the authority of other rulers outside those boundaries. We develop a model to explain how the major economic and military developments in Europe starting in the fifteenth century contributed to the development of this system. Our model rationalizes the system as an economic cartel in which self‐interested and forward‐looking rulers maintain high tax revenues by reducing competition in the “market for governance.”

Suggested Citation

  • Avidit Acharya & Alexander Lee, 2018. "Economic Foundations of the Territorial State System," American Journal of Political Science, John Wiley & Sons, vol. 62(4), pages 954-966, October.
    • Handle: RePEc:wly:amposc:v:62:y:2018:i:4:p:954-966
    DOI: 10.1111/ajps.12379
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    Cited by:

    1. Jesús Fernández-Villaverde & Mark Koyama & Youhong Lin & Tuan-Hwee Sng, 2023. "The Fractured-Land Hypothesis," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 138(2), pages 1173-1231.
    2. Jordan Adamson & Erik O Kimbrough, 2023. "The supply side determinants of territory," Journal of Peace Research, Peace Research Institute Oslo, vol. 60(2), pages 209-225, March.
    3. Ennio E. Piano, 2019. "State capacity and public choice: a critical survey," Public Choice, Springer, vol. 178(1), pages 289-309, January.
    4. Justin Fox & Mattias Polborn, 2021. "On the separation of executive and legislative powers: Executive independence, liberty, and social welfare," Journal of Theoretical Politics, , vol. 33(4), pages 430-454, October.

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