The State and State formation

Question 1

Neoclassical Theory of economics

Answer 1

A theory of rational choice

Question 2

Public choice theory

Answer 2

This is the idea of economics being applied to politics. That is, applying neoclassical economics to understand the functioning of politics

Question 3

Property rights

Answer 3

Property rights are important to the state (in contract theory) because they serve as a means of regulating or limiting societal activities in order for the state to serve as a wealth maximizer for society i.e. achieve economic growth. The way this can be done is through property rights. However, in the predatory theory of the state property rights are important because they maximize the revenue of a very specific group or class in society that controls the state.

Question 4

A state

Answer 4

An organization with a comparative advantage in violence, extending over a geographic area whose boundaries are determined by its power to tax constituents.

Question 5

Contract theory of the state

Answer 5

This is the idea that the state places the role of a wealth maximizer for society. This idea of maximizing societal wealth manifests as economic growth, and in order to induce economic growth, you have to limit the activities and behaviors of individuals relative to others. To achieve this sort of societal stability requires contracts. This theory specifically explains why contracting initially is really important but does not explain maximizing behavior of individuals with diverse interests.

Question 6

Predatory theory of the state (Marxist)

Answer 6

This is the idea that the state is an agency of a specific group or class in society and its main function is to extract income from the rest of its constituents in the interest of that very specific group of people. So in a predatory theory of the state, property rights are meant to maximize the revenue of that specific group or class in power, regardless of its impact on the wealth of the society as a whole. The theory ignores initial gains of contracting and focuses on the extraction of rents from individuals by groups who gain control of the state.

Question 7

Distribution of violence potential

Answer 7

What makes contract theory and predatory theory of the state similar is the distribution of violence potential; where contract theory assumes an equal distribution of violence potential amongst individual in power and predatory theory assumes an unequal distribution.

Question 8

North’s neoclassical theory of the state

Answer 8

To understand the state north says we need to understand three characteristics of the state. The first is that a state trades protection and justice for private property in exchange for revenue from its constituents. The second is that the state will try and act like a discriminating monopolist. The third is that the state is constrained by the opportunity cost (the cost of an outside opportunity) of its constituents. That is, there are rivals external to the state that can provide justice and protection to constituents and this is what checks the state and makes them credibly commit to providing justice and protection, because if they don’t they won’t be able to extract revenue from constituents and maximize societal wealth.

Question 9

Economies of scale

Answer 9

In North’s neoclassical theory of the state, because there are economies of scale in organization within a state providing justice and protection to its constituents versus each individual protecting their own property, total income in a society will increase, which is in line with what a wealth-or utility-maximizing ruler desires.

Question 10

Discriminating monopolist

Answer 10

This is the idea that in North’s neoclassical theory of the state, a state will try and separate groups of constituents and create property rights schemes for each so that they can maximize state revenue. This is, property rights will look different for each group in society and the uniqueness of the property rights will allow for the state to maximize revenue as best it can from each group.

Question 11

Degree of monopoly power

Answer 11

This is the idea that in North’s neoclassical theory of the state, the state is constrained in its behavior by the opportunity cost of its constituents by external rivals who can provide justice and protection of expropriation, so the ability for the state to be a monopoly requires that the provisions offered to constituents by rivals be weak in their ability to substitutes the state.

Question 12

Contractual rules of the game

Answer 12

In North’s theory of the state, the state provides justice and protection over property rights of its constituents, but this needs to be established either unwritten (feudal manor) or as a written constitution. What these unwritten and written rules do is specify cooperation and competition which provides a structure for property rights. That is, who owns factor and product markets for maximizing rents accruing to the ruler, and how do we reduce transaction costs in order to get more taxes for the state for those who are maximizing rent.

Question 13

The fundamental dichotomy of the state

Answer 13

North contends that the cause of the failure of society to experience sustained economic growth is the tension between the ownership structure which maximizes rents to the ruler (and his group) and an efficient system that reduces transaction costs and encourages economic growth.

Question 14

Utility function of the ruler and agents of the ruler

Answer 14

This is the idea that in order to enforce property rights a ruler needs to create infrastructure to do this. This, however, requires that the ruler delegate some power to agents of the ruler. The ruler and the agents do not have the same utility function with regard to how property rights should be designed and as such because of the incongruence, monopoly rents will be lost by the state.

Question 15

Supply curve of protection

Answer 15

This is the idea that it is expected that the ruler and the constituents enter a contractual agreement where the ruler provides protection and justice and the constituents provide revenue. However, the shape of the supply curve of protection plays a role in if the ruler is able to do this. That is, if the supply curve is u-shaped, that is as you increase protection it gets more costly to do so, the state will not be able to uphold its end of the bargain and as such rivals (other states, individuals, groups) serve as substitutes for the states protection and there again is a loss of revenue that should be the states.

Question 16

Military technology

Answer 16

In the neoclassical theory of the state, this is what determines the supply curve of the protection. That is, if you have updated military technologies or if you don’t.

Question 17

Competitive constraint and transaction cost constraint of the ruler

Answer 17

In the neoclassical theory of the state gives rise to two constraints on the ruler, where the competitive constraint will mean the ruler will avoid offending powerful constituents who could potentially be rivals of the state in terms of providing protection and justice; and the transaction cost constraint means that because the ruler now has potential rivals he is going to structure property rights to favor these individuals, which will make them more efficient but also make transaction costs of monitoring, metering, and collecting taxes) much more difficult because there will be more individuals to monitor. It is these two constraints that will cause wide spread inefficient property rights.

Question 18

Inefficient property rights

Answer 18

Inefficient property rights are important in the neoclassical theory of the state because they threaten the survival of the state

Question 19

A State

Answer 19

is a human community that successfully claims the monopoly of the legitimate use of physical force within a given territory and is considered the sole source of the right to use violence (legitimate violence). A modern State is a compulsory association which organizes domination, by expropriating the functionaries of estates who formerly controlled these means in their own right.

Question 20

Politics

Answer 20

Striving to share power or striving to influence the distribution of power among states or among groups within a state

Question 21

Legitimations of domination

Answer 21

This is basically the idea that individuals obey rulers for different reasons. Weber gives three justifications as to why individuals will obey: traditional legitimacy, charismatic legitimacy, and legal legitimacy

Question 22

Charismatic legitimacy

Answer 22

this is the idea that a ruler is seen as legitimate because they are a good leader so they are heroic or charismatic. So people are keen on obeying a leader not because it is tradition or because legally they have to, but they do so because they actually just believe what the ruler is saying.

Question 23

Legal legitimacy

Answer 23

This is legitimacy based off of rules that are created by institutions. That is, as an individual who exists in a State you are under the rule of an individual based off of laws

Question 24

Legitimate power

Answer 24

The idea of legitimate power is that rulers are able to maintain their domination over individuals, because they control the material goods that are necessary for the use of physical violence. These resources are specially the personal executive staff and the material implements of administration. That is, the bureaucracy.

Question 25

Bureaucratic state order

Answer 25

A bureaucratic state order is a necessary condition in the development of the modern state. That means there has to be a separation of the administrative staff, of the administrative officials, and of the workers from the material means of administrative organization is completed

Question 26

Political expropriation

Answer 26

This is the idea that in the formation of the modern State, the state has combined the material means of organization in the hands of its leaders and it has taken away the autonomous functionaries of estates who formerly controlled these means so the State has replaced these estates.

Question 27

Professional politicians

Answer 27

After political expropriation occurs, there will be individuals who don't wish to be leaders themselves, but actually just want to service leaders because they are able to make a living and because they find this work idea. These individuals actually are very instrumental in bureaucracy and achieving political expropriation.

Question 28

European experience of state consolidation

Answer 28

In Europe state-building occurred based on the Bellicist or war theory of state formation put forth by Charles Tilly. That is a centralized state apparatus was created during these times because of wars of territorial conquest, which came about because population densities increased and land became more scarce. When the state forms in this way, it becomes a matter of life and death to raise taxes, enlist men as soldiers, and develop the infrastructure to fight. Because of the constant threat of war, leaders were forced to control remote areas that could be lost in battle. It was the defense of borders that protected the state from external competitors and also consolidated the power of the state.

Question 29

Hinterlands

Answer 29

In the European experience of state formation, because the state was forged through war, it was imperative for the state to be able to have control of its outermost regions. They achieved this by having the national government directly ruling more local areas that would otherwise be under local government rule.

Question 30

Frontier fortifications

Answer 30

In order to old a state together, the state has to have direct rule over its periphery in order to prevent external competitors from territorial conquest. It is this process that allows for the consolidation of the state.

Question 31

European state formation via urban centers

Answer 31

Urban centers are important for the European story of state formation, because the transport networks between the urban centers and rural areas could be taxed (excise taxes and customs). That is, urban centers are important in the story of state formation because capital flows to cities and as such they serve as containers and distribution points for capital. As a result, because urban ruling classes have access to this capital they can extend their reach out to the hinterlands and across trade networks resulting in a consolidation of the state.

Question 32

African state formation

Answer 32

In the african context state formation did not happen in the same way as europe in that in this case states were created before the movement of capital to urban centers was a thing. When colonization happened, europeans did not create in the same way they did in europe because they were not interested in duplicating power structures but instead interested in extracting from the state in service of the colonizers. This is evidenced by the actual locations of the capitals created on the coast meaning that as cities developed, their reach inward was tenuous.

Question 33

Settler colonies

Answer 33

In settler colonies in Africa, you see that the colonial state's reach was extended in a comprehensive manner unlike in the extractive colonies.

Question 34

Nationalist movements

Answer 34

After the colonial period, nationalist movements emerged, but the rural areas had been neglected by colonial governments there was a large peasant population, and few roads and telephones, many politicians did not tend to invest in mobilizing the rural areas and as a result nationalist politics were urban affairs.

Question 35

Resources allocated by the state

Answer 35

In urban centers, politicians would largely overlook the rural areas and even provide subsidies to urban populations while still taxing the rural areas even though they were more populated.

Question 36

Instability of the state

Answer 36

the state can become destabilized via technology, information costs, and population growth (Malthusian trap)

Question 37

Traditional legitimacy

Answer 37

this is the idea that a ruler is legitimate as ordained by some divinity, which is often exercised by a patriarch