State Capacity and Economic Development

ECON 2729 Subject & Catalog Number

This course examines how institutions and the state shape the process of economic development — both over the long run and in day-to-day governance. It covers research on the historical origins of state capacity and its impact on long-run development — for worse when state capacity is extractive or fosters conflict, and for better when it is inclusive and promotes growth. It also investigates how states influence contemporary economic outcomes through social protection programs and the provision of public goods.

Having established the importance of state capacity for development, the course then turns to the practical challenges of building capacity, focusing on fiscal, legal, and bureaucratic dimensions. It further explores the pitfalls of state power, with particular attention to corruption and governance failures, and concludes by examining the “frontiers of the state,” where non-state actors substitute for, complement, or challenge state authority.

We engage with these topics both theoretically and empirically, with an emphasis on recent advances in empirical economic methods — including natural experiments, field experiments, and lab-in-the-field experiments.