State Formation, Regime Change, and Economic Development
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State Formation, Regime Change, and Economic Development

Jørgen Møller

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State Formation, Regime Change, and Economic Development

Jørgen Møller

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About This Book

Failed or weak states, miscarried democratizations, and economic underdevelopment characterize a large part of the world we live in. Much work has been done on these subjects over the latest decades but most of this research ignores the deep historical processes that produced the modern state, modern democracy and the modern market economy in the first place.

This book elucidates the roots of these developments. The book discusses why China was surpassed by Europeans in spite of its early development of advanced economic markets and a meritocratic state. It also hones in on the relationship between geopolitical pressure and state formation and on the European conditions that – from the Middle Ages onwards – facilitated the development of the modern state, modern democracy, and the modern market economy. Finally, the book discusses why some countries have been able to follow the European lead in the latest generations whereas other countries have not.

State Formation, Regime Change and Economic Development will be of key interest to students and researchers within political science and history as well as to Comparative Politics, Political Economy and the Politics of Developing Areas.

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Publisher
Routledge
Year
2016
ISBN
9781134827077

Part I
Big questions

1
State Formation, Regime Change, and Economic Development

In the introduction, I made clear that the aim of this book is to answer – or at least partially answer – some of the ‘big questions’ of social science (cf. Mahoney and Rueschemeyer 2003, 7; Skocpol 2003, 409). More particularly, the book revolves around three general questions:
  • (1) What are the causes of the state-formation process that has culminated in the modern territorial state/nation-state?
  • (2) What are the causes of the regime change process that led to the introduction of representative institutions and later culminated in modern democracy?
  • (3) What are the causes of the economic development that has culminated in the modern market economy?
To further substantiate and narrow down these three questions, this chapter considers the key concepts of state, regime, and market economy.

The state

Most people probably feel about the state like Augustine felt about time; we instinctively seem to know what the word covers, but when asked directly we struggle to provide a clear definition. The most important distinction in this area is between ‘minimalist’ and ‘maximalist’ definitions of the state. The minimalist definition of the state renders it possible to trace the first states six thousand years back in time (Diamond 1999[1997]). According to this view, the state is any organization of society that is more sophisticated than a tribe. Charles Tilly (1990, 1), to whom we will return in Chapter 9, has formalized the minimalist definition as follows: states are ‘coercion-wielding organizations that are distinct from households and kinship groups and exercise clear priority in some respects over all other organizations within substantial territories’.
Max Weber offers a more maximalist definition of the state as an entity that possesses a monopoly on the legitimate use of force within a specific territory. This definition, at the very least, includes a monopoly on force internally, territoriality, and sovereignty externally (Poggi 2013, 64–65). This might not initially appear particularly demanding, but the legitimate monopoly on force implies ‘modern’ organs such as the military, the bureaucracy, the courts, and the police. The legitimacy of the modern, territorial state means that the citizenry normally follows its rules, partly because these rules are embedded in a rule-of-law mind-set and partly due to the presence of a common political community (Held 2006[1987], 131; see also Poggi 2013). This kind of power apparatus has not existed in the vast majority of the states that fit the minimalist definition. What Weber has in mind is the modern, territorial state as it has emerged in Europe since the High Middle Ages (Poggi 2013, 64).
Various scholars base their work on Weber’s definition, although many add specific elements that they claim are underspecified in Weber (see, e.g., Skocpol 1985, 7; Gill 2003, 2–6; O’Donnell 2010, 51–53).1 If we accept Weber’s definition, the state is a relatively recent (Western) European invention. A brief foray into the etymology of the word illustrates this.2 The word ‘state’ is terminologically the same throughout pretty much all of Western Europe. The Italians use stato, the Spanish estado, the French état, and the Germans Staat.3 All these words stem from the Latin STATVS. With the rediscovery of Roman Law in the High Middle Ages, this word was first used to describe the legal position of certain corporate groups, such as the nobility, the king, the church, and later the townsmen. However, the word STATVS lost its attachment to status groups and was instead linked to the power apparatus and legal order in society – that is, what we today understand as the state.4
A common observation is that the modern European state distinguishes itself from all others in terms of its basic legalism (Finer 1997a, 1300–1301). Here, it is interesting to compare the word with the corresponding Russian, gosudarstvo, meaning ‘rule’. As Hosking (2001, 91) points out, there is no distinction in the Russian use between personal ownership and political authority. In other words, the state is something that is more general and impersonal in Western political thought. It is this sense – that is, the state in this gestalt – that Weber attempts to capture with his celebrated definition.
This modern territorial state or nation-state can to some extent be seen as the negation of the much looser feudal state of the Middle Ages (Poggi 1978). The state-like entities of the Middle Ages did not distinguish between public and private authority and had fluid territorial boundaries (because vassal relations cut across nascent borders). The modern state, on the other hand, is defined by the distinction between public and private affairs and by its territoriality (Finer 1997b, 1265; Poggi 2013). As Gill (2003, 4) points out, the Weberian state actually distinguishes itself from all other – earlier – state forms in its ability to penetrate society. At the same time, it is both externally and internally sovereign (Gill 2003, 5).
The former entails that the modern territorial state is part of a relatively stable state system. As mentioned in the introduction, this external pressure has been crucial for the emergence of the state. The latter, Weber observes, means that the state has an internal monopoly on the legitimate use of physical force. The point is that the modern state is not marked by internal conflicts between competing groups or by the presence of armed groups within the territory, as was the case in the European Middle Ages. No other organizations within the state – for example, mafia groups – have a legitimate right to use coercive means. But this internal power monopoly is couched in international competition with other states (Held 2006[1987], 130). This geopolitical competition is at the core of Otto Hintze’s (1975[1906]) pioneering understanding of the emergence of the modern state, to which we will return in Chapter 5.
The emergence of this modern, Western European form of the state is the primary focus of this book, but I will occasionally use the minimalist definition in order to trace the state further back in time. That is, the book makes use of two different definitions of the state – first, a minimalist definition, which sees a state as any territorial organization that is more sophisticated than a tribe (cf. Tilly’s definition above). Explicit mention will be made in the text when this definition is applied. All other instances refer to the Weberian definition of the modern, territorial state.
The explanatory quest is, then, to understand the process that, in Weber’s words, has rationalized state power. In this context, it is important to note that the Weberian definition is agnostic in relation to the regime. In short, whether a state is democratic or not has no bearing on whether it is modern (Gill 2003, 6). This brings us to the second general research question of this book.

The regime

The easiest way to distinguish between state and regime form is to remain with Weber. Mazzuca (2010a) uses Weber’s body of writing to establish a relatively simple distinction, which is important in this context: the state is defined by the exercise of power; the regime, by access to power. That the exercise of power is the core of the state is apparent in the section above. However, the control over the state power apparatus is regulated via the regime. In other words, in an autocracy there is one set of rules for access to power; in a democracy, another. Ertman (1997), who is discussed in Chapter 9, captures this two-dimensional distinction in a four-fold table (see Table 1.1).
Table 1.1 Ertman’s typology over states in eighteenth-century Europe
Political regime
Absolutist Constitutional

Character of state infrastructure Patrimonial Patrimonial absolutism Patrimonial constitutionalism
Bureaucratic Bureaucratic absolutism Bureaucratic constitutionalism
The point Ertman (1997, 6–10) makes is that both constitutional and autocratic regimes can be combined with different state types – in this case, respectively, a bureaucratic and a patrimonial one (another distinction borrowed from Weber). Ertman’s constitutional regime is defined by the parliament acting as co-legislator together with the ruler (see also Finer 1997b, 1307). This regime form has also been termed the ‘polity of Estates’ (Myers 1975).
A voluminous literature has touted the representative institutions (aka polity of Estates) described by Ertman as a necessary condition for the nineteenth- and twentieth-century advent of modern democracy. These institutions – the Estates or parliaments and diets of the High Middle Ages – represent the first part of Brian M. Downing’s (1992, 10) definition of ‘medieval constitutionalism’. As presented in Chapter 9, Downing traces modern representative democracy back to these institutions. Robert A. Dahl (1989, 215), the greatest democracy theorist of the twentieth century, has phrased it in the following way:
The first successful efforts to democratize the national state typically occurred in countries with existing legislative bodies that were intended to represent certain fairly distinctive social interests: aristocrats, commoners, the landed interest, the commercial interest, and the like. As movements toward greater democratization gained force, therefore, the design for a ‘representative’ legislature did not have to be spun from gossamer fibers of abstract democratic ideas; concrete legislatures and representatives, undemocratic though they were, already existed.
The representative institutions/Estates originated around the year 1200 on the Iberian Peninsula and spread in the following centuries throughout Western and Central Europe – an area also referred to as Western Christendom in this book (Myers 1975, 24). Tellingly, the entire period 1200–1789 has been referred to as the age of the ‘polity of Estates’ by some scholars (e.g., Myers 1975).
In recent years, there has been a strong focus on the importance of representative institutions for state-building, regime change, and economic development (Stasavage 2010; 2011; 2014; Van Zanden et al. 2012; Blaydes and Chaney 2013). In this connection, scholars have taken note of some crucial differences within the category. An older distinction, which goes back to Otto Hintze (1962[1930]), has been made between strong bicameral parliaments, such as the English case and weak three-chamber parliaments (Dreikuriensystem) as found in, e.g., France (see also Ertman 1997). Stasavage (2010) has more specifically identified the meeting frequency and prerogatives of the representative institutions, including whether or not they had a veto over the imposition of taxes and the right to audit the monarch’s use of the resulting revenues. These distinctions play a major role in Ertman’s (1997) and Stasavage’s (2010) respective explanations of the influence of representative institutions on state formation and deficit finance in the High and Late Middle Ages.
The representative institutions are thus important for the state formation processes in the European past as well as the democratization that unfolds after 1800. Both processes are of interest in this book. However, the slightly narrow focus on representative institutions means that the political gains of the twentieth century, including equal and universal suffrage, lie beyond the scope of the book. Another feature of modern democracy with roots in the Middle Ages, namely constitutionalism, is relevant, however. The constitutional element – as indicated by the qualifying adjective in the term ‘liberal democracy’ (Sartori 1987) – is historically peculiar to Western Christendom and can, as mentioned above, be traced all the way back to the High Middle Ages (Hintze 1975[1931]; Downing 1992; Sabetti 2004). This unique feature is placed in relief by the fact that even the absolute states of Europe (with the exception of Russia) were legalistic and marked by the presence of corporative barriers blocking the exercise of power (Finer 1997b, 1298–1303, 1419).
In constitutional regimes, the exercise of power is subject to constitutional barriers. In contemporary parlance, this means that there are hard and fast rules for how laws are to be formulated and passed, and that a higher law (the constitution) guarantees certain basic rights (Sartori 1987, 308). Until the rise of the modern constitutions towards the end of the eighteenth century and the beginning of the nineteenth century, these barriers were not based on written laws, but the logic was basically the same. If we supplement the constitutional element with the demand for political competition over the power to rule5 – through a form of election to representative institutions, albeit often based on a very limited suffrage – and the existence of modern freedoms such as freedom of expression, association, and assembly, we have more or less captured modern democracy as it emerged in nineteenth-century Western Europe. The point is that the elements of this regime form can be traced all the way back to the Middle Ages (Dahl 1989).
To sum up, the primary purpose of the treatment of regime change in this book is to shed light on the development of representative institutions and constitutionalism that has marked Europe since the Middle Ages and that not even the advent of absolutism after 1600 could erase.

The market economy

The book reviews a number of studies that aim to explain the emergence of the modern market economy in Western Europe.6 The common premise of these analyses is that the market economy has caused the explosive growth in recent centuries (see, e.g., North and Thomas 1973, 1) and brought about today’s global disparity in prosperity levels. North and Thomas (1973, 1) see this concept as essentially defined by the protection of private property and ownership rights, as economic efficiency is practically automatic when private property is protected. Jones (2008[1981], 245) touches on the same idea but formulates it in more general terms when he points to the eradication of legal arbitrariness as essential for the modern market economy. In Western Europe, arbitrariness was replaced by stable law enforcement, which rendered it possible to invest and harvest the fruits of these investments. Landes (1998, 59) also thinks along these lines when he explains effective, market-based competition with the abolition of the arbitrary exercise of power (265).
There is much more about this in Chapters 12 and 13. In general, we can say that from the perspective of these authors, the market economy will unfold when the authorities ensure the framework for rational economic behaviour. If labour is free of barriers created by, for example, serfdom or guild privileges, and if the authorities prevent attacks on private property, productivity increases will ensue. This situation guarantees that the ‘invisible hand’ described by Scottish economist Adam Smith in The Wealth of Nations can come into effect. The consequences inc...

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