State Capacity and Public Goods: Institutional Change, Human Capital, and Growth in Early Modern Germany

Jeremiah E. Dittmar and Ralf R. Meisenzahl

No 2016-028, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: What are the origins and consequences of the state as a provider of public goods? We study legal reforms that established mass public education and increased state capacity in German cities during the 1500s. These fundamental changes in public goods provision occurred where ideological competition during the Protestant Reformation interacted with popular politics at the local level. We document that cities that formalized public goods provision in the 1500s began differentially producing and attracting upper tail human capital and grew to be significantly larger in the long-run. We study plague outbreaks in a narrow time period as exogenous shocks to local politics and find support for a causal interpretation of the relationship between public goods institutions, human capital, and growth. More broadly, we provide evidence on the origins of state capacity directly targeting welfare improvement.

Keywords: Education; Growth; Human Capital; Institutions; Persistence; State Capacity (search for similar items in EconPapers)
JEL-codes: I25 N13 O11 O25 (search for similar items in EconPapers)
Pages: 79 pages
Date: 2016-03-15
New Economics Papers: this item is included in nep-gro and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedgfe:2016-28

DOI: 10.17016/FEDS.2016.028

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