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Events
On the Origin of States: Stationary Bandits and Taxation in Eastern Congo
May 6, 2015Poverty and Applied Microeconomics Seminar Series

Raul Sanchez de la Sierra (Harvard University) will present the results of recent research.

Speaker: Raul Sanchez de la Sierra is an Assistant Professor at the Haas School of Business. More »

Abstract: When do states arise? When do they fail to arise? This question has generated scholarship across all social sciences. A dominant view is that states first arise when violent actors impose a monopoly of violence in order to extract taxes (Carneiro, 1970, Tilly, 1985). One fundamental fact affects all existing studies: statistics were the creation of states. There is therefore little statistical evidence on the causes that lead to the formation of states. As a foundation for this study, I organized the collection of village-level panel data on violent actors, managing teams of surveyors, village elders, and households in 380 war-torn areas of DRC. I introduce optimal taxation theory to the decision of violent actors to establish local monopolies of violence. The value of such decision hinges on their ability to tax the local population. A sharp rise in the global demand for coltan, a bulky commodity used in the electronics industry, leads violent actors to impose monopolies of violence and sustain taxation contracts in coltan sites, which persist years after the demand collapses. A similar rise in the demand for gold, easier to conceal and more difficult to tax, does not. My findings support the view that the expected revenue from taxation, determined in particular by tax base elasticity, can explain the first stages of state formation.

Paper

Last Updated: May 04, 2015

The Poverty and Applied Micro Seminar Series is a weekly series hosted by the World Bank's research department. The series invites leading researchers in applied microeconomics from the fields of poverty, human development and public service delivery, agriculture and rural development, political economy, behavioral economics, private sector development, and a range of other fields to present the results of their most recent research in a seminar format. The full list of seminars can be viewed here.

Event Details
  • Date: May 6, 2015
  • Location: World Bank Headquarters, MC3-570
  • Time: 12:30 - 2:00 p.m.
  • CONTACT: Anna Bonfield
  • abonfield@worldbank.org