State Capacity and Economic Development : A Network Approach ∗

  title={State Capacity and Economic Development : A Network Approach ∗},
  author={Daron Acemoglu and Camilo Garcia-Jimeno and James A. Robinson},
We study the direct and spillover effects of local state capacity in Colombia. We model the determination of state capacity as a network game between municipalities and the national government. We estimate this model exploiting the municipality network and the roots of local state capacity related to the presence of the colonial state and royal roads. Our estimates indicate that local state capacity decisions are strategic complements. Spillover effects are sizable, accounting for about 50… CONTINUE READING
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