Must-Read: : States and Economic Growth: Capacity and Constraints: “In this survey we review the contributions of economic history to the study of state capacity…
…Economic history makes an important contribution to understanding how state capacity developed by ‘decompressing’ the historical coevolution of fiscal capacity, legal capacity, and rule of law. We emphasize the heterogeneity in the experiences of the countries which have eventually achieved rule of law states. We present two lessons drawn from historical research. The first is that institutions which respect the rule of law are unlikely to be robust unless a state has first adopted intermediate fiscal and political institutions which create incentives for,first elites, and eventually the rest of the population, to support them. Second, we emphasize the difficulties associated with disentangling the role of public-order and private-order institutions in generating support for growth-enhancing institutions. We argue that, in fact, both have played vital roles in the creation of institutions which support the rule of law in modern states.