Mark Koyama

Tax Farming and the Origins of State Capacity in England and France

How did modern and centralized fiscal institutions emerge? We develop a model that explains (i) why pre-industrial states relied on private individuals to collect taxes; (ii) why after 1600 both England and France moved from competitive methods for collecting revenues to allocating the right to collect taxes to a small group of financiers—an intermediate institution that we call cabal tax farming—and (iii) why this centralization led to investments in fiscal capacity and increased fiscal standardization. We provide detailed historical evidence that supports our prediction that rulers abandoned the competitive allocation of tax rights in favor of cabal tax farming in order to gain access to inside credit, and that this transition was accompanied by investments in standardization. Finally (iv) we show why this intermediate institution proved to be self-undermining in England, where it was quickly replaced by direct collection, but lasted in France until the French Revolution.

Jewish Persecutions and Weather Shocks: 1100-1800

What factors caused the persecution of minorities in pre‐modern Europe? Using panel data consisting of 1,366 persecutions of Jews from 936 European cities between 1100 and 1800, we test whether persecutions were more likely following colder growing seasons. A one standard deviation decrease in growing season temperature in the previous five‐year period increased the probability of a persecution by between 1 and 1.5 percentage points (relative to a baseline of 2%). This effect was strongest in weak states and with poor quality soil. The long‐run decline in persecutions was partly attributable to greater market integration and state capacity.

Taxes, Lawyers, and the Decline of Witch Trials in France

This paper explores the rise of the fiscal state in the early modern period and its impact on legal capacity. To measure legal capacity, we establish that witchcraft trials were more likely to take place where the central state had weak legal insti- tutions. Combining data on the geographic distribution of witchcraft trials with unique panel data on tax receipts across 21 French regions, we find that the rise of the tax state can account for much of the decline in witch trials during this period. Further historical evidence supports our hypothesis that higher taxes led to better legal institutions.

Development and Religious Polarization: The Emergence of Reform and Ultra-Orthodox Judaism

Jewish emancipation in nineteenth century Europe produced drastically different responses. In Germany, a liberal variant known as Reform developed, while ultra-Orthodox Judaism emerged in eastern Europe. We develop a model of religious organization which explains this polarization. In developed regions, religious authorities embrace the prospect of cultural integration by relaxing probhibitions and benfitting from greater financial contributions. In poorer regions, religious authorities adopt a strategy of cultural resistance, enforcing prohibitions to elicit greater contributions of effort. In regions of intermediate development, religious schisms and cycles occur. This analytic narrative sheds light on how economic development can lead to cultural change.

Prosecution Associations in Industrial Revolution England: Private Providers of Public Goods?

In early nineteenth-century England, there was no professional police force and most prosecutions were private. This paper examines how associations for the prosecution of felons arose to internalize the positive externalities produced by private prosecutions. Drawing upon new historical evidence, it examines how the internal governance and incentive structures of prosecution associations enabled them to provide public goods. Consistent with the reasoning of Demsetz (1970), I find that prosecution associations were economic clubs that bundled the private good of insurance with the public good of deterrence. Associations used local newspapers to advertise rewards and attract new members. Price discrimination was employed in order to elicit contributions from individuals with different security demands. Selective incentives helped to overcome free-rider problems between members.

Legal centralization and the birth of the secular state

This paper investigates the relationship between the historical process of legal central- ization and increased religious toleration by the state. We develop a model based on the mathematics of mixture distributions which delineates the conditions under which legal centralization raises the costs faced by states of setting a narrow standard of orthodox belief. We compare the results of the model with historical evidence drawn from two important cases in which religious diversity and state centralization collided in France: the Albigensian crusades of the thirteenth century and the rise of Protestant belief in the sixteenth century.

Unified China and Divided Europe

This paper studies the causes and consequences of political centralization and fragmentation in China and Europe. We argue that the severe and unidirectional threat of external invasion fostered political centralization in China while Europe faced a wider variety of moderate external threats and remained politically fragmented. Our model allows us to explore the economic consequences of political centralization and fragmentation. Political centralization in China led to lower taxation and hence faster population growth during peacetime than in Europe. But it also meant that China was relatively fragile in the event of an external invasion. Our results are consistent with historical evidence of violent conflicts, tax levels, and population growth in both China and Europe.

Legal Centralization and the Birth of the Secular State

This paper investigates the relationship between the historical process of legal central- ization and increased religious toleration by the state. We develop a model based on the mathematics of mixture distributions which delineates the conditions under which legal centralization raises the costs faced by states of setting a narrow standard of orthodox belief. We compare the results of the model with historical evidence drawn from two important cases in which religious diversity and state centralization collided in France: the Albigensian crusades of the thirteenth century and the rise of Protestant belief in the sixteenth century.

Bones, Bacteria and Break Points: The Heterogeneous Spatial Effects of the Black Death and Long-Run Growth

The Black Death killed about 40% of Europe’s population between 1347-1352. Historical studies suggest that this mortality shock played a major role in shifting Europe onto a path to sustained economic growth. Using a novel dataset that provides information on spatial variation in plague mortality at the city level, as well as a range of controls and various identification strategies based on the spread of the epidemic, we explore the short-run and long-run impact of the Black Death on city growth. We find evidence for aggregate convergence. On average, cities recovered their pre-plague population within two centuries. However, there was considerable heterogeneity in the response to the shock, hence local divergence. The Black Death led to an urban reset: cities with better geographical and non-geographical endowments did relatively well, while other cities collapsed. In particular, our results emphasize the importance of trading networks in explaining urban recovery. Furthermore, the Black Death led to the creation of new cities in areas that were relatively less urbanized before it hit. Our analysis thus suggests that the Black Death may have permanently affected the spatial distribution and aggregate level of economic activity, potentially contributing to long-run growth in Europe.

Establishing a New Order: The Growth of the State and the Decline of Witch Trials in France

The growth of the 17th century French state contributed to the establishment to a more regular, and even liberal legal order. Higher fiscal demands on the state led to a process of legal standardization that extended the rule of law. We use data on witch trials and taxation covering twenty-one regions between 1550 and 1700 to support this claim. Regions where higher taxes were collected were also less likely to see witch trials. Thus fiscal consolidation promoted a more rational legal order.