State Capacity as an Organizational Problem. Evidence from the Growth of the U.S. State Over 100 Years

Nicola Mastrorocco and Edoardo Teso

No 31591, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 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 novel 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 innovations lowering monitoring costs facilitate the emergence of modern bureaucratic states.

JEL-codes: D73 M51 N41 P0 (search for similar items in EconPapers)
Date: 2023-08
New Economics Papers: this item is included in nep-his, nep-soc and nep-ure
Note: DAE POL
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Working Paper: State Capacity as an Organizational Problem. Evidence from the Growth of the U.S. State Over 100 Years (2023)
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