Unit IV (State and Markets): State Capacity in Latin America (Cardenas) Flashcards
What is the primary focus of the sources regarding state capacity in Latin America?
The relationship between inequality, conflict, and state capacity.
How does land ownership affect political economy in Latin America?
It shapes the concentration of economic and political power, limiting state capacity.
What development strategy influenced land values and ownership patterns in 19th century Latin America?
Export-led development strategy focused on commodity production.
What role does land ownership play in political institutions in Latin America?
It contributes to the persistence of economic inequality.
What is fiscal capacity?
The state’s ability to raise revenues, crucial for providing public goods and supporting economic development.
How do high concentrations of economic and political power affect state capacity?
They discourage investment in state capacity due to fears of losing power.
What is the impact of internal conflicts on state capacity in Latin America?
They have a destructive effect, undermining efforts to build strong state institutions.
What is the correlation between income inequality and state capacity?
High levels of income inequality weaken state capacity and democratic effectiveness.
True or False: External wars have had a more significant impact on state capacity in Latin America compared to internal wars.
False.
What does the author propose is necessary to improve state capacity in Latin America?
Addressing political and economic inequalities.
Fill in the blank: The average tax revenue to GDP ratio in Latin America between 1980 and 2006 was _______.
20.6%
What historical factor has limited political participation in Latin America?
Slow extension of suffrage compared to other regions.
What is the vicious cycle mentioned in the sources regarding state capacity?
High inequality leads to low investment in state capacity, perpetuating inequality.
What is the implication of weak state capacity on Latin American economies?
Increased vulnerability to external economic shocks.
How does high economic inequality affect the consolidation of democracy in Latin America?
It undermines the positive effects of democratization on state capacity.
What historical legacy affects state institutions in Latin America?
Colonial structures and elite dominance.
What is one recommendation made for improving state capacity in Latin America?
Investing in building a professional and meritocratic bureaucracy.
What does the author suggest is crucial for sustainable economic development in Latin America?
Building strong and effective institutions.
What methodology does the author use to support their arguments about state capacity?
Historical data and econometric analysis.
What is the relationship between democracy and state capacity in the presence of high inequality?
The positive impact of democracy is significantly weakened.
What does the term ‘state capacity’ encompass in the context of this analysis?
The ability of the state to collect taxes and provide public goods.
What does the author argue about the effects of internal conflicts on state institutions?
They consistently undermine efforts to build robust state institutions.
What is the importance of strong and effective institutions for economic development in Latin America?
Strong institutions are crucial for achieving sustained and equitable growth
They help in building a professional bureaucracy, strengthening the rule of law, promoting transparency, and fostering civic engagement.
What does ‘state capacity’ refer to in the context of this paper?
The ability of the state to provide public goods and support the economy with a sound legal framework
It focuses on fiscal capacity (raising revenues) and legal capacity (supporting contracts and property rights).
What are the key dimensions used to assess state capacity?
Fiscal and legal state capacity
Fiscal capacity includes tax revenue shares; legal capacity includes bureaucratic quality and indices from the World Bank.
How does Latin America’s fiscal state capacity compare to East Asia?
Latin America generally exhibits weaker fiscal state capacity
It has lower GDP share of total tax and income tax revenues compared to East Asia.
What is the ‘colonial origins’ theory?
It suggests that pre-colonial conditions influenced the development of institutions affecting state capacity
Regions with large economies of scale developed extractive institutions, while those with dispersed production fostered better property rights.
How do external and internal wars affect state capacity?
External wars can drive state development, while internal conflicts are destructive to state capacity
Internal wars disrupt governance, destroy infrastructure, and undermine tax collection.
What is the relationship between political and economic inequality and state capacity?
Both can negatively affect investment in state capacity
Higher political inequality may lead ruling groups to prefer redistributing resources rather than investing in state capacity.
How is the theoretical model tested empirically?
Using cross-country regressions examining relationships between state capacity and determinants like democracy and external wars
Findings generally support the model’s propositions.
What are the implications for improving state capacity in Latin America?
Addressing fiscal state capacity weaknesses is crucial
Reducing internal conflicts and economic inequality could foster better investment in state capacity.
What is the distinction between ‘legal’ and ‘fiscal’ state capacity?
Legal state capacity encompasses institutions for contracts and property rights; fiscal state capacity refers to revenue-raising ability
This paper primarily focuses on fiscal capacity.
What are two categories under which state capacity can be grouped?
Military capacity and fiscal state capacity
Military capacity measures the ability to overcome rebellion; fiscal capacity measures the ability to raise revenue.
What are the two most representative measures of state capacity identified by Hendrix?
Bureaucratic quality and GDP share of total taxes
These measures explain a large proportion of variance across state capacity measures.
What is the exceptional characteristic of Latin America regarding state capacity?
Underdeveloped fiscal state capacity
Latin America has a lower GDP share of total tax and income tax revenues than other regions.
What argument do Engerman and Sokoloff present regarding pre-colonial economic structures?
Regions with productive crops developed extractive institutions, hindering property rights and fiscal capacity
Smaller-scale agriculture favored institutions that protected property rights.
How does a higher future valuation of public goods affect government investment in state capacity?
It encourages increased investment in state capacity in the present period
This is to better provide those goods in the future.
Under what condition does the ‘common interest state’ occur?
When the value of public goods is higher than the political weight assigned to private consumption
It leads to the provision of public goods.
What is the relationship between democracy and state capacity in Latin America?
Democracy is positively correlated with state capacity, but effects are weakened by income inequality
Higher income inequality dampens the benefits of democratization on state capacity.
