Elite Competition and State Capacity Development: Theory and Evidence from Post-Revolutionary Mexico
by Francisco Garfias, University of California, San Diego
How do states develop the ability to carry out public policies? To answer this question, I describe a path to the development of state capacity based on domestic political conflict. When factions within a state are in conflict, rulers don’t expect to remain in power for long. This inhibits their incentives to invest in developing state capacity. If their rivals experience temporary weakness, rulers seize upon the opportunity to secure power. Anticipating a longer tenure, rulers have a higher incentive to develop state capacity. I put these ideas to the test in post-revolutionary Mexico, where the Great Depression weakened the local economic elite relative to new local rulers that emerged from the civil war. Temporary elite weakness leads to higher land expropriation, which consolidates the rulers’ authority. It also leads to higher investments in state capacity, which persist to the present.