State Capacity and Military Conflict

In 1500, Europe was composed of hundreds of statelets and principalities, with weak central authority, no monopoly over the legitimate use of violence, and multiple, overlapping levels of jurisdiction. By 1800, Europe had consolidated into a handful of powerful, centralized nation states. We build a model that simultaneously explains both the emergence of capable states and growing divergence between European powers. In our model, the impact of war on the European state system depends on: i) the capital intensity of war (which stands for the …nancial cost of war), and ii) a country’s initial level of domestic political fragmentation. We emphasize the role of the “Military Revolution”, which raised the cost of war. Initially, this caused more internally cohesive states to invest in state capacity, while other (more divided) states rationally dropped out of the competition. This led to both increasing divergence between European states, and greater average state building on the continent overall.