DP13719 Political Geography and Pre-Industrial Development: A Theory and Evidence for Europe 1000-1850

Author(s): Matteo Cervellati, Sara Lazzaroni, Giovanni Prarolo, Paolo Vanin
Publication Date: May 2019
Keyword(s): Borders, Centrality and Location, market potential, Pre-Industrial Development, Sovereign Polities, Space and Territorial Control
JEL(s):
Programme Areas: Macroeconomics and Growth
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13719

We present a theory of the drivers, and a measurement of the patterns, of the evolution of historical sovereign polities over time and space in Europe, and we study their impact on pre-industrial urban development. We model changing state capacity and rule of law over space as resulting from strategic interactions between ruling elites. We characterize the endogenous evolution of equilibrium number, size, borders and type of polities. The framework characterizes the timing and location of appearance (and disappearance) of city states and the transition from domain reigns to modern territorial states. The model predicts the emergence of hard borders and a reversal in the role of locations' centrality for development. We measure the territorial evolution of sovereign polities by assembling geo-referenced yearly panel data on the political geography of each location in Europe for the period 1000-1850 and we investigate its implications for pre-industrial urban growth. Results document a changing role of polity size and type and a reversal of centrality from across to within polities which is associated to increasing importance of domestic market potential after the XVII century.