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Economic Foundations of the Territorial State System
Author(s) -
Acharya Avidit,
Lee Alexander
Publication year - 2018
Publication title -
american journal of political science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 6.347
H-Index - 170
eISSN - 1540-5907
pISSN - 0092-5853
DOI - 10.1111/ajps.12379
Subject(s) - cartel , state (computer science) , fifteenth , corporate governance , revenue , competition (biology) , political economy , tax revenue , economic system , political science , economy , economics , market economy , law , history , management , ancient history , algorithm , computer science , ecology , accounting , biology , incentive
The contemporary world is organized into a system of territorial states in which rulers exercise authority inside clearly defined boundaries and recognize the authority of other rulers outside those boundaries. We develop a model to explain how the major economic and military developments in Europe starting in the fifteenth century contributed to the development of this system. Our model rationalizes the system as an economic cartel in which self‐interested and forward‐looking rulers maintain high tax revenues by reducing competition in the “market for governance.”