 Multiple steady statehood: the roles of productive and extractive capacitiesJournal of Economic Growth, 2021, vol. 26, issue 2, No 1, 113-152 Abstract: Abstract This paper proposes a model of statehood, defined as elite extraction of resources from a subject population. Different from most of the existing literature, the size of the subject population evolves endogenously in a Malthusian fashion, and the elite take into account the effects on future population levels when taxing the current population. The elite can spend extracted resources by investing in productive and extractive capacities. Productive capacity increases the size of the pie, while extractive capacity makes it easier for the elite to tax it. Together—but not each on its own—these two types of investment can give rise to multiple steady-state equilibria, such that one steady state has both a higher rate of extraction, and higher population density and output, than the other steady state. The model can also account for a positive empirical relationship between land productivity and state antiquity among countries with relatively late state development. Keywords: Malthusian model; Statehood; Multiple steady states (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:kap:jecgro:v:26:y:2021:i:2:d:10.1007_s10887-021-09188-9 Ordering information: This journal article can be ordered from DOI: 10.1007/s10887-021-09188-9 Access Statistics for this article Journal of Economic Growth is currently edited by Oded Galor More articles in Journal of Economic Growth from Springer |
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