Ec 1342 Week 9 Paper - Historical variation in state...

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Historical variation in state capacity across Asia may help explain the rise of certain East Asian economies because in areas with strong historical state, citizens are better able to organize for public goods and redistribution. A strong local state and social capital also appear to substitute for formal impersonal property right and financial markets. A strong historical state is associated with higher economic development and provides more public goods. An example is The East Asian miracle where we see that Chinese, Korean, and Japanese states were stronger and more centralized. They were governed historically for centuries through a competitive selected bureaucracy. Villages were the central unit of organization for tax, legal, and military purposes. In South East Asian states, such as the polities of Indonesia and Filipino archipelagos, we see they followed a decentralized patron-client model. Their power relations were personalized and clientelistic, village was not an important unit of organization, which lead to weak control in peripheries. Looking at Vietnam, results show that Dai Viet villages are better able to organize for public goods through local governments, and these villages have a stronger civil society, but a strong historical state and certain formal institutions appear to be substitutes. In Dai Viet villages, there is lower use of formal land titles and financial instruments. The results from Dai Viet can be interpreted as, decentralization with participatory governance may work better in areas with a long

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