State Capacity and Economic Development: A Network Approach
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Acemoglu_State capacity.pdf
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902.48 KB
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Author(s)
Acemoglu, Daron
Garcia-Jimeno, Camilo
Robinson, James A.
Date Issued
August 2015
Journal
American Economic Review
Publisher
American Economic Association
Citation
Acemoglu, Daron, Camilo Garcia-Jimeno, and James A. Robinson. “State Capacity and Economic Development: A Network Approach.” American Economic Review 105, no. 8 (August 2015): 2364–2409. © 2015 American Economic Association
Version
Final published version
Abstract
We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50 percent of the quantitative impact of an expansion in local state capacity, but network effects driven by equilibrium responses of other municipalities are much larger.
MIT Department
Massachusetts Institute of Technology. Department of Economics
Terms of Use
Article is made available in accordance with the publisher's policy and may be subject to US copyright law. Please refer to the publisher's site for terms of use.
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DOI of Published Version
https://doi.org/10.1257/aer.20140044
