Unit IV (State and Markets): State Capacity in Latin America (Cardenas)

Question 1

What is the primary focus of the sources regarding state capacity in Latin America?

Answer 1

The relationship between inequality, conflict, and state capacity.

Question 2

How does land ownership affect political economy in Latin America?

Answer 2

It shapes the concentration of economic and political power, limiting state capacity.

Question 3

What development strategy influenced land values and ownership patterns in 19th century Latin America?

Answer 3

Export-led development strategy focused on commodity production.

Question 4

What role does land ownership play in political institutions in Latin America?

Answer 4

It contributes to the persistence of economic inequality.

Question 5

What is fiscal capacity?

Answer 5

The state’s ability to raise revenues, crucial for providing public goods and supporting economic development.

Question 6

How do high concentrations of economic and political power affect state capacity?

Answer 6

They discourage investment in state capacity due to fears of losing power.

Question 7

What is the impact of internal conflicts on state capacity in Latin America?

Answer 7

They have a destructive effect, undermining efforts to build strong state institutions.

Question 8

What is the correlation between income inequality and state capacity?

Answer 8

High levels of income inequality weaken state capacity and democratic effectiveness.

Question 9

True or False: External wars have had a more significant impact on state capacity in Latin America compared to internal wars.

Answer 9

False.

Question 10

What does the author propose is necessary to improve state capacity in Latin America?

Answer 10

Addressing political and economic inequalities.

Question 11

Fill in the blank: The average tax revenue to GDP ratio in Latin America between 1980 and 2006 was _______.

Answer 11

20.6%

Question 12

What historical factor has limited political participation in Latin America?

Answer 12

Slow extension of suffrage compared to other regions.

Question 13

What is the vicious cycle mentioned in the sources regarding state capacity?

Answer 13

High inequality leads to low investment in state capacity, perpetuating inequality.

Question 14

What is the implication of weak state capacity on Latin American economies?

Answer 14

Increased vulnerability to external economic shocks.

Question 15

How does high economic inequality affect the consolidation of democracy in Latin America?

Answer 15

It undermines the positive effects of democratization on state capacity.

Question 16

What historical legacy affects state institutions in Latin America?

Answer 16

Colonial structures and elite dominance.

Question 17

What is one recommendation made for improving state capacity in Latin America?

Answer 17

Investing in building a professional and meritocratic bureaucracy.

Question 18

What does the author suggest is crucial for sustainable economic development in Latin America?

Answer 18

Building strong and effective institutions.

Question 19

What methodology does the author use to support their arguments about state capacity?

Answer 19

Historical data and econometric analysis.

Question 20

What is the relationship between democracy and state capacity in the presence of high inequality?

Answer 20

The positive impact of democracy is significantly weakened.

Question 21

What does the term ‘state capacity’ encompass in the context of this analysis?

Answer 21

The ability of the state to collect taxes and provide public goods.

Question 22

What does the author argue about the effects of internal conflicts on state institutions?

Answer 22

They consistently undermine efforts to build robust state institutions.

Question 23

What is the importance of strong and effective institutions for economic development in Latin America?

Answer 23

Strong institutions are crucial for achieving sustained and equitable growth

They help in building a professional bureaucracy, strengthening the rule of law, promoting transparency, and fostering civic engagement.

Question 24

What does ‘state capacity’ refer to in the context of this paper?

Answer 24

The ability of the state to provide public goods and support the economy with a sound legal framework

It focuses on fiscal capacity (raising revenues) and legal capacity (supporting contracts and property rights).

Question 25

What are the key dimensions used to assess state capacity?

Answer 25

Fiscal and legal state capacity ## Footnote Fiscal capacity includes tax revenue shares; legal capacity includes bureaucratic quality and indices from the World Bank.

Question 26

How does Latin America's fiscal state capacity compare to East Asia?

Answer 26

Latin America generally exhibits weaker fiscal state capacity ## Footnote It has lower GDP share of total tax and income tax revenues compared to East Asia.

Question 27

What is the 'colonial origins' theory?

Answer 27

It suggests that pre-colonial conditions influenced the development of institutions affecting state capacity ## Footnote Regions with large economies of scale developed extractive institutions, while those with dispersed production fostered better property rights.

Question 28

How do external and internal wars affect state capacity?

Answer 28

External wars can drive state development, while internal conflicts are destructive to state capacity ## Footnote Internal wars disrupt governance, destroy infrastructure, and undermine tax collection.

Question 29

What is the relationship between political and economic inequality and state capacity?

Answer 29

Both can negatively affect investment in state capacity ## Footnote Higher political inequality may lead ruling groups to prefer redistributing resources rather than investing in state capacity.

Question 30

How is the theoretical model tested empirically?

Answer 30

Using cross-country regressions examining relationships between state capacity and determinants like democracy and external wars ## Footnote Findings generally support the model's propositions.

Question 31

What are the implications for improving state capacity in Latin America?

Answer 31

Addressing fiscal state capacity weaknesses is crucial ## Footnote Reducing internal conflicts and economic inequality could foster better investment in state capacity.

Question 32

What is the distinction between 'legal' and 'fiscal' state capacity?

Answer 32

Legal state capacity encompasses institutions for contracts and property rights; fiscal state capacity refers to revenue-raising ability ## Footnote This paper primarily focuses on fiscal capacity.

Question 33

What are two categories under which state capacity can be grouped?

Answer 33

Military capacity and fiscal state capacity ## Footnote Military capacity measures the ability to overcome rebellion; fiscal capacity measures the ability to raise revenue.

Question 34

What are the two most representative measures of state capacity identified by Hendrix?

Answer 34

Bureaucratic quality and GDP share of total taxes ## Footnote These measures explain a large proportion of variance across state capacity measures.

Question 35

What is the exceptional characteristic of Latin America regarding state capacity?

Answer 35

Underdeveloped fiscal state capacity ## Footnote Latin America has a lower GDP share of total tax and income tax revenues than other regions.

Question 36

What argument do Engerman and Sokoloff present regarding pre-colonial economic structures?

Answer 36

Regions with productive crops developed extractive institutions, hindering property rights and fiscal capacity ## Footnote Smaller-scale agriculture favored institutions that protected property rights.

Question 37

How does a higher future valuation of public goods affect government investment in state capacity?

Answer 37

It encourages increased investment in state capacity in the present period ## Footnote This is to better provide those goods in the future.

Question 38

Under what condition does the 'common interest state' occur?

Answer 38

When the value of public goods is higher than the political weight assigned to private consumption ## Footnote It leads to the provision of public goods.

Question 39

What is the relationship between democracy and state capacity in Latin America?

Answer 39

Democracy is positively correlated with state capacity, but effects are weakened by income inequality ## Footnote Higher income inequality dampens the benefits of democratization on state capacity.