Two Skeptical Questions About State Capacity
By Bryan Caplan
Many economists I know, especially the fans of Douglas North, appeal to the concept of “state capacity” to explain economic development, human rights, health, and other social outcomes. In their stories, with few exceptions, high state capacity leads to good things, low state capacity leads to bad things.
Lurking in the background is what I call the the naive Statist Theory of Everything. Why does society X have good thing Y? Because society X’s awesome government provided Y. Why doesn’t society Z have good thing Y? Because society Z’s crummy government failed to provide Y.
As far as I can tell, the state capacity story is supposed to differ from the Statist Theory of Everything. But only obvious difference is packaging: advocates of the state capacity theory tend to decorate their story with mild libertarian sympathies. More substantial differences are hard to detect. Yes, you could say, “I’m not saying that society X has good thing Y because its awesome government provided Y. I’m saying that society X has good thing Y because its government has the capacity to provide good things of all sorts.” But this answer seems at once vague and evasive.
Of course, the state capacity story’s tension with the libertarian worldview isn’t much of an argument against it. Yet faced with the state capacity story, you would at least expect social scientists – regardless of their political leanings – to raise their two standard skeptical challenges to every explanatory concept. Namely:
1. Appeals to “state capacity” sound tautologous: “Why did state X provide good thing Y? Because it has the capacity to provide good things like Y.” So if you’re going to use state capacity to explain the world, you first need to convince me it’s more than mere post hoc tautology.
2. Assuming state capacity isn’t mere tautology, it’s presumably going to correlate strongly with a bunch of other good things – current per-capita GDP, a long history of per-capita GDP, social trust, public opinion, cultural closeness to other successful societies, etc. So if you’re going to use state capacity to explain the world, you also need to convince me that state capacity, rather than any of its blatant correlates, has a big independent effect.
I admit I haven’t read widely in the state capacity literature. Most of what I know comes from listening to lunch conversations from aficionados of the approach. Perhaps my elementary challenges have long since been acknowledged and addressed. If so, please share in the comments. I’m all ears – but please tell me you’ve got something better than the settler mortality stuff.