"The state is among the greatest developments in human
history and a precursor of economic growth. Why do states arise, and
when do they fail to arise? A dominant view across disciplines is that
states arise when violent actors impose a "monopoly of violence" in
order to extract taxes. One key fact underlies all existing studies: no
census exists prior to the state. In this paper, I provide the first
econometric evidence on the determinants of state formation. As a
foundation for this study, I conducted fieldwork in stateless areas of
Eastern Congo, managing a team that collected village-level panel data
on current armed groups. I develop a model that introduces optimal
taxation theory to the decision of armed groups to form states, and
argue that the returns to such decision hinge on their ability to tax
the local population. A sharp, exogenous rise in the price of a bulky
commodity used in the video-game industry, coltan, leads armed groups to
impose a "monopoly of violence" in coltan villages. A later increase in
the price of gold, easier to conceal and hence more difficult to tax,
does not. Results based on two alternative identification strategies are
also consistent with the model. The findings support the hypothesis
that the expected revenue from taxation, in particular tax base
elasticity, is a determinant of state formation."I liked the paper so much that I even reached out to the author (and I don't ever write fan-mail) and asked about communities self-generating a competing 'monopoly of violence'!State formation is a hot topic these days with all the talk of state-building (or the failure to achieve it) and fragile states. Access to resources, either directly or indirectly (through taxation, bribes, fees, shares, corvee or whatever term comes to mind) remains key for institutional (in a very loose sense) survival. Whether Stationary or Stationery (sorry, I had to do the pun... it is so apt!!) Bandits the important point is the ability to control the resource and not so much the actual value per unit. This connects with James C. Scot's argument (from his bookThe Art of Not Being Governed: An Anarchist History of Upland Southeast Asia)on how people would deliberately and reactively remain stateless.The key strategy is to remain non-legible (difficult to assess and capture) therefore making state control of populations and resources impractical or extremely costly. Interestingly enough, so called conflict minerals (because the revenue generated fuel conflict) may be a source of stability in some situations, in comparison with 'standard banditry'. Unfortunately, Development and Governance interventions in conflict/post-conflict/transition situations rarely take taxation (or other institutional revenue generation) and the subsequent dynamics between institutions and people as a foundation for 'state' presence and rather take a normative or rights based approach Very interesting paper and clearly food for thought!HT to Chris Blattman
