Given today’s heightened competition between national economies in the global marketplace, many have come to believe that government intervention is needed in order for a country to maximize its economic well-being. But to what extent can even the most capable government act to attract investment and enhance economic growth without creating or exacerbating conflicts in society—especially when unpopular measures, such as those aimed at controlling inflation and population growth, must be implemented? This timely book by an international team of economists and political scientists tackles that question head on. The contributors draw on theory and empirical data to provide a framework for measuring governments’ ability to gather material resources and mobilize populations. They analyze a variety of policy choices made in the United States and in other nations arond the world during the past fifty years, showing how states can increase their political capacity and thereby reduce economic transaction costs and domestic resistance to government goals.
Introduction -- The Concept of Political Capacity -- Relative Political Capacity: Political Extraction and Political Reach -- Theoretical Link of Political Capacity to Development -- Economic Applications -- Political Capacity and Economic Determinants of Inflation -- Political Capacity and the Use of Seigniorage -- Political Capacity and Private Investment -- Political Capacity and Economic Growth -- Political Capacity, Macroeconomic Factors, and Capital Flows -- Political Capacity and Black Market Premiums -- Political Applications -- Political Capacity and Government Resource Transfers -- Political Capacity and Demographic Change -- Political Capacity and Violence -- Political Capacity, Growth, and Distributive Commitments -- Extending Political Capacity -- Political Capacity and the Economic Frontier -- New Estimates of Political Capacity -- Alternative Approaches to Estimating Political Capacity -- The Unfinished Agenda