LECTURE 7-8: FISCAL CAPACITY

Question 1

Fiscal capacity

Answer 1

measure of the capability of a political entity to raise and spend public resources

Question 2

Expansion of islam world based on 2 skills

Answer 2

• ability to absorb rather than impose administrative structure and knowledge of conquered place
• unification of all territories under a common language

Question 3

11th crisis

Answer 3

political crisis and instability with internal and external pressure (demise of caliphate into small regions, rise of Western Europe)

Question 4

explanation for decline

Answer 4

-geography
- religion
- fiscal capacity

Question 5

geography

Answer 5

• location and long distance routes: Arabs had lot of trade power but cities were landlocked, rise of competitive European trade, far from where trade happens
• worsening climatic conditions reduced potential for agri

Question 6

religion: renan, kuran, greif

Answer 6

• renan: religious assumptions and set of beliefs blocked innovation and technological change
• kuran: islam supports the creation of laws that led to institutional divergence, diff between christian and Arabs
• greif: islam as the foundation of culture which led to divergence (Genoese vs maghribi)

Question 7

greif Genoa magrhibi

Answer 7

very similar but diverged: genoese develop formal institutions: individualist, strong and generalised morality, impersonal ties
maghribi: informal partnership and trade only between them. collectivist, strong intra group ties

Question 8

fiscal capacity

Answer 8

classical equilibrium

Question 9

classical equilibrium

Answer 9

• influential monotheistic clergy
• ruler with monopoly over coercive fore

Question 10

CE Europe

Answer 10

process of fragmentation from external military pressures. from CE to 3 competing powers: sovereign, clergy and landed aristocracy, emergence of effective checks on the ruler power

Question 11

CE Middle East

Answer 11

ruler relies on slave armies as an alternative to the landed aristocracy, region remained in the CE (no third power, no fragmentation, centralisation)

Question 12

blades

Answer 12

fiscal capacity (stronger in califate where sovereign kept his central powers and weaker in Europe where monarchs had to negotiate with local barons) influenced the type of military system (employ aristocracy and give them land and power vs mercenary power) which led to different political outcomes (checks on the king vs absolute power and emergence of alternative opposition).

Question 13

feudalism

Answer 13

codified land grants as forms of compensation for military support of domestic elites, which led to creation of landed aristocracy
- more stable: longer ruler duration and lower chance of revolt by elite
- fracture of power created a vacuum and competition among the 3 emerged
- increase in institutional innovation
- multiple and more equitable legal systems
- more power decentralisation to guarantee stability to ruler
- consequence of weak fiscal capacity

Question 14

mamluk

Answer 14

Buying military service from soldiers recruited as slaves. temporary land grants, isolated.
- stronger fiscal and administrative capacity: no need of landed aristocracy, don’t need to decentralise
- dual legal system

Question 15

collusion

Answer 15

collusion between the 2 powers vs competition among 3 limited institutional innovation and development of a more equitable legal system

Question 16

diff ruler stability Europe

Answer 16

• decrease rents of sovereign
• increase rents of potential rivals
• decrease payoffs from successful revolt
• lower likelihood of revolt
• increase in ruler duration

Question 17

ruler stability middle eats

Answer 17

• high diff between ruler and rival rents
• high payoff from successful revolt
• lower ruler duration

Question 18

two models of public credit

Answer 18

• territorial monarchies: contracting loans from bankers and merchants
• city-states: loans with residents (forced loans and indirect taxes)

Question 19

two sided of fiscal capacity

Answer 19

political representation and public credit

Question 20

political representation

Answer 20

assemblies to extract taxes and regulate debt

Question 21

model

Answer 21

executive needs to raise resources for war with citizens possessing liquid wealth to be invested.

Question 22

contracting problem

Answer 22

willing to lend only if policy actions will be coherent with initial need
executive needs power to alter policies in case of unexpected drop of revenues

Question 23

solutions

Answer 23

• full specification of future course of action
• executive grants lenders a degree of autnomony and control over future policies =>emergence of representative assemblies

Question 24

intensive political participation

Answer 24

intensive political participation (assemblies, monitoring and modifying) = facilitating access to credit

Question 25

2 conditions to be fulfilled

Answer 25

• presence of small-scale polities
• assembly’s composition: - Assemblies were more likely to take actions consistent with the interests of state creditors in polities where the same merchants who invested in government debt were also predominant among the political elite (elite of creditors).

Question 26

Conditions for the development of public credit:

Answer 26

city-state or geographically-limited state in which an oligarchy (merchnats) that represents creditors rules and controls the flow of finances.

Question 27

representation within city-states took on a much more intensive form than was the case in territorial states

Answer 27

Representative bodies in city-states met frequently, and they played an active role in monitoring not only taxation but also public spending and borrowing. If a representative body is to exert a degree of control over public finances to this extent, then it seems plausible to suggest that the assembly will need to meet frequently. In larger territorial states it was rare to see assemblies meet even annually.