Productive specialization, peaceful cooperation and the problem of the predatory state
lessons from comparative historical political economy
Originally published in Public Choice
This paper reconceptualizes and unbundles the relationship between public predation, state capacity and economic development. By reframing our understanding of state capacity theory from a constitutional perspective, we argue that to the extent that a causal relationship exists between state capacity and economic development, the relationship is proximate rather than fundamental. State capacity emerges from an institutional context in which the state is constrained from preying on its citizenry in violation of predefined rules limiting its discretion. When political constraints are not established to limit political discretion, then state capacity will degenerate from a means of delivering economic development to a means of predation. In addition, we investigate two case studies of economic and political transition: the privatization of Russia following the collapse of the Soviet Union; and the political unification of Sicily with the Italian peninsula following the Napoleonic Wars. In each case, political and economic transition intended to secure well-defined and well-enforced property rights empowered the predatory capacity of the state. In each case, the attempt to redistribute property rights through political discretion only facilitated predation by the political elite.