This paper uses economic history to probe the relationship between state capacity and economic growth during the Great and Little Divergences (c.1500–c.1850). It identifies flaws in the dominant measure of state capacity, fiscal capacity, and advocates instead analysing state expenditures. It investigates five key activities on which states historically spent resources: waging war; providing law and administration; building infrastructure; pursuing industrial policy; and fostering a national culture. The lesson of history, it concludes, is not to build a capacious state. Rather, we need a state that uses its capacity to help (or at least not hinder) market activity.

The deepening distrust in democracy has grown out of a decade of low growth and cuts to public spending, which in turn has consolidated wage decline while also fuelling a wider sense of economic insecurity. As poverty and inequality intensify, social mobility is in reverse and the social contract is under growing strain. Support for populists has recently receded, but the inability of democratic systems to address deep-seated problems sows the seeds for future populist revolts. Both left- and right-wing governments have responded to increasing anger and alienation with policies that exacerbate existing inequalities of income and wealth, combined with disparities of decision-making power and social status. These are ethical as much as economic questions and they demand a much more robust response than technocratic administration. Otherwise, ethical social democracy and communitarian conservatism will fail to defeat the authoritarianism of both radical-right national populists and the tech-utopianism of far-left populists.

Populism is a paradoxical phenomenon that resists easy categorisation because it both rejects and intensifies certain elements of technocracy. Populist politics is at once a backlash against liberal-technocratic ideology and policy and an attempted corrective of some of its worst excesses, such as increasing inequality or pressures on wages. Despite deep differences, both rest on a binary logic that conceals alternatives to the convergence around variants of techno-populism defended by either ‘corporate populists’ or ‘insurgent populists’. One alternative is a public policy programme focused on the building of an economic democracy with more democratic workplaces and a greater emphasis on the dignity of decent jobs, besides policies to reduce regional disparities and foster shared prosperity. But policies alone cannot fully address the deep-seated grievances fuelling the support for populists. Fundamental institutional reform is needed to devolve power and wealth to people and the places where they live and work.

This study examines the distribution options of 85 large public retirement plans covering general state employees, teachers, and local government employees. The interest rates used to price annuities vary considerably across the plans. As a result, retirees with the same monthly benefit if a single life benefit is chosen will have substantially different monthly benefits if they select a joint and survivor annuity. We examine the impact of variation in the pricing of annuity options using both cross-plan differences in interest rates and the change in the choice of annuity options in one plan after the price of options changes due to new assumed interest rates and mortality rates.

Choices regarding the disposition of wealth at retirement can have substantial implications for retirement income security. We analyze the factors determining annuity payout option choices within the context of a public sector defined pension plan with no default annuity option. Using combined administrative records and survey data, we explore the role of individual and household characteristics as well as risk preferences, time preferences, and financial literacy. We also document retiree well-being and satisfaction with retirement decision making. The evidence is consistent with predictions over which households might benefit most from each annuity option. Comparing retirees who chose different types of annuities, we find that these groups of retirees report very different levels of well-being in retirement. All retirees report lower levels of retirement income security over time, with strong differences among those who chose different types of annuities.

Traditionally, benefit-cost analyses focus on average benefits and average costs. However, heterogeneous treatment effects and/or costs are most often present, which means that there is an efficiency potential hidden in the implementation of public programs, if policies can be targeted at those who, net of costs, benefit the most. We introduce efficiency potential defined as the ratio between the net benefit achieved under perfect selection of the individuals with significant positive net benefit of program participation, and the actually realized benefits net of costs. Using data from a randomized control-trial experiment of a Danish return-to-work program combined with rich administrative records and survey data, we find that there is indeed a potential for increased efficiency. Results from the treatment literature indicate that, generally, it may be difficult to harvest the full potential. Our application corroborates this finding.

After California voters decided in a state initiative to ban gestation crates and battery cages, some are asking whether other states will host similar initiatives and if they will pass. This study addresses this question by using voting data in California to predict how voters in other states would respond to a similar initiative. Results suggest that a number of states allow such initiatives and possess a demographic profile favorable to the initiative's passage. However, because these states host only a small portion of the livestock population, the impact of such initiatives on the well-being of farm animals is questionable.

We focus on regulations controlling the spread of noxious weeds, especially the trade effects of regulatory differences across U.S. states. We specify a gravity model for each state's seed, nursery product, and commodity trade with each other state. Within the gravity model, we examine the role of cross-state regulatory congruence arising from ecological and agronomic characteristics and interest-group lobbying. A spatial-autoregressive Tobit model is estimated with a modified expectation-maximization algorithm. Results show that weed regulatory congruence positively affects interstate trade. By fostering cross-state regulatory differences, consumer and commodity-producer lobbying reduce the value of interstate trade by about two percent per annum.

This article contributes to the small literature on the relationship between the range of local public services and population size. Using new data on French local jurisdictions, we test the hypothesis that larger jurisdictions provide a broader range of public goods (the so-called “zoo effect”, Oates (1988)). We take advantage of the fact that, in France, many municipalities recently joined together, forming groups of municipalities (or communities) in order to achieve economies of scale. Using spatial econometrics, we find some evidence for the existence of a zoo effect in French communities. In other terms, larger communities provide a broader range of services than smaller ones. The intensity of the zoo effect is higher in urban than in rural areas.

This article deals with the relations between taxation and prices levels in seventeenth century Castile through an analysis of the influence of royal and municipal taxes on the retail prices of cheap wine in Madrid between 1606 and 1700. First part describes the taxes levied on cheap wine by the Castilian Crown and the town council in Madrid. Both kinds of taxes provided the Royal and the City Treasuries with the most important part of their tax revenues. Second part analyzes how the Royal and the city authorities estimated the monetary value of the taxes and excises levied on this beverage. Lastly, third part shows that the burden of the royal and municipal taxes levied on a litre of cheap wine rose during the period. If in 1606-10 both types of taxes amounted to around 30 per cent of the retail prices of a litre of cheap wine, in the last third of the century this percentage had risen to 60-65 per cent.

Cet article propose une analyse économique de la sécession. Il s’inspire des travaux d’Alesina et Spolaore (1997), de Berkowitz (1997) et de Bolton et Roland (1997). Le raisonnement mené au niveau des Etats est largement transférable aux collectivités locales (régions, villes,…). Le recours à une représentation spatiale de la population nous permet d’appréhender l’hétérogénéité des préférences individuelles en matière de bien public. Le pays est supposé divisé en deux régions. La décision de sécession résulte d’un arbitrage individuel entre pression fiscale et localisation du bien public local, cet arbitrage évoluant selon la taille et le découpage régional du pays. En l’absence de disparités de revenus, nous montrons que le centre, la plus grande des deux régions, est davantage enclin à l’indépendance. Une approche normative, en terme de surplus, conclut notre analyse en appréciant l’efficacité économique du processus démocratique. Il apparaît alors que toute sécession unilatérale réduit le bien-être des deux régions.