Of late, economists and historians have become increasingly focused on the political economy of the state and identifying what explains why some nations are rich and some are poor. To name just two of the most prominent recent contributions, Douglass North, John Wallis, and Barry Weingast in Violence and Social Orders: A Conceptual Framework for Interpreting Recorded Human History (Cambridge: Cambridge University Press, 2009), and Daron Acemoglu and James Robinson in Why Nations Fail (New York: Crown Business, 2012) have tried to explain why extractive/oligopolistic elites have tended to predominate and have been replaced with great difficulty by more productive orders in only a minority of the world's nations. But as Carles Boix in this current work notes, there has been insufficient attention to developing a theory of how and why these elites formed in the first place and what forces tend to promote institutional reform. In addition, there has been little work trying to integrate these issues with the broader problem of the sources of inequality and inequality's relationship to the institutions that do or do not foster development.
In a talk originally written for a North festschrift (see John Nye, “Thinking About the State.” In Frontiers in the New Institutional Economics, edited by John Drobak and J. Nye. San Diego: Academic Press, 1997), I argued that a persistent problem for the work of Doug North and Mancur Olson was their arbitrary assumption of a pre-existing ruler without a positive theory that integrated the economics of production with the technology of control to generate a theory of state organization that would account for long-run changes in political and economic institutions. Using an analogy with the Coase theorem, I asked why a similar theorem that allowed for transformation and exchange even in a world with violent coercion was not forthcoming? I believe that Boix's book is an important step in this direction.
Boix combines the literature on developed state economies with the anthropological literature on hunter-gatherer societies to develop a theory of the interaction between the capacity for unequal production and the need for hierarchy. Using a simple game theoretic model, he shows how relatively equal societies can be stable without anything resembling modern hierarchy or even a powerful leader. However, the possibility of unequal productivity or access to resources changes the game and destabilizes primitive societies. A transition to a more productive system based on cooperation or differential access to resources produces unequal outcomes, and thus means a shift to hierarchy for preserving stability, since inequality would otherwise lead to unsustainable conflict. But this new system's final form is heavily determined by the nature of coercive control technology and its interactions or tradeoffs with economically productive technology. In this way, it can be seen as complementary to the work of North, Wallis, and Weingast, who stress the necessity of elite coalitions providing rents to themselves as a condition of a stable bargain that limits conflict between ruling groups and allows for greater productivity.
Boix however, has more of a focus on the links between technological conditions of both production and warfare and the way that these coevolve with the form of the state. He draws on the vast historical literature on political forms around the world, especially in the shifts from the classical period to the medieval period to the modern state. He is particularly good in his use of the historical literature on how the instruments of war shaped the possibilities available for political and economic coalitions that are implicit in the existing economic theory based explanations but which are not spelled out. However, it is also the case that the importance of these changes is not explicitly derived from his particular theory.
It is not a knock on this excellent and insightful book if he has left out a number of issues that still need to be fleshed out in future research—whether by Boix or other scholars.
For one thing, his models and his discussion do little to integrate the problems of coordination and conflict with the forms of hierarchy that are observed or that are sustainable. There is no citation in the book to the work of Ronald Coase or Oliver Williamson and no awareness that the problems of cooperation unique to organizational bureaucracies might have something to say about which kinds of states emerge and why states adapted to one type of productive technology might not be simultaneously capable of making use of the latest military technology. A deep consideration of the role of internal organization and how its choices affect the quality of both a nation's productivity and military effectiveness might go some way to explaining why it is so rare to have societies that are good at optimizing on both fronts.
I also think there is potentially interesting work to be done in exploring the interaction between biological, cultural, and genetic conditions and how these affect societal equilibria. As Garett Jones notes in his recent book Hive Mind (2015), low health, low IQ societies are liable to have low discount rates and have greater difficulty supporting complex institutions of cooperation that promote high productivity. Boix notes that primitive stateless societies are noted for their high degree of familiarity and jovialness punctuated by seemingly random acts of lethal violence that are often simply ignored and not dealt with as systematic crimes (p. 52). While his discussion of the underlying conditions of cooperation and equality go some way to explaining why this might persist, he says nothing about the psychological and biological conditions that would make such outbursts more or less common or how greater cognitive ability and changing patience might allow for greater cooperation and less random violence, while having rarer but more destructive wars.
Nonetheless, these are just footnotes to what is a profoundly interesting and insightful work that should be of special interest to economic historians and to specialists in the new institutional economics.
