Centeno (state strength - PP)

Importance of wars for state building/formation:

• Wars help build the institutional basis of the modern state

• Wars have a political influence

• Wars require capital

• Wars both built and were an expression of political power

Gauging state strength with regards to taxes and war:

• Taxes both represent and augment the strength of the state

• Taxes may be viewed as a way to measure the strength of the state because they demonstrate the size of state strength in regards to a states ability to enforce "centralized rule" on a particular area.

• War increases the capacity of a state to tax its population

• state revenue increases after war and the structure of taxation also changes

• Wars led the British and American states in the 18th and 19th century respectively, to both "increase the amount of revenue" and "increase the relative importance of domestic and direct taxes"

Three critical prerequisites for institutional development aided by war:

One of these is the "administrative mechanisms" of the state to manage the expenditure and revenue changes that will occur. Another is Internal Financial Pressure: States must confront financial challenges via domestic extraction, often catalysed by war, the relevant states must be forced to look inward when addressing financial challenges. Lastly, it is a requirement that the state must already be established and also must have adequate local support to make extraction profitable.

Challenging the paradigm

• capacity of a state to extract resources will be closely linked to the willingness of the population to accept these burdens.

• state capacity is not absolute phenomenon but a relational one, it is not merely a question of strength but also of the potential of the relevant societies to resist (or welcome) intrusion.

• more successful war-making states established a coalition between central authority and potential aristocratic challengers either through alliance (England) or coercion

Latin America was caught in an inertial equilibrium:

No class was powerful enough to impose its domination and no state was strong enough to enforce its control.

States are shells:

• potentially powerful shells, but nevertheless hollow at the core

• Without a driver "the political and military shell of the state has no direction

What is required for a fiscal system is not simply constitutional powers but the a bureaucratic capacity to enforce these.

There needs to be an alliance between a social sector and the political institution in place, this element of cooperation can lend power to a state, allowing it to capitalise in war times and grow.

Both Brazil and Chile were dependent on customs revenues, accounting for around 2/3s of revenue, so,

the upward trend in tax receipts can be accredited to increased connection to the global economy, not a stronger state.

in general, Latin American states were not able to escape the "cycle of levies, bankruptcies and mutinies" (Kaiser) that characterised warring states prior to the revenue revolution of the late 17th century;

they were not built by war.

Explaining the Latin American pattern:

• Dependence on the international economy, at least from a fiscal lens, can be seen as a weakness of political institutions (states)

• The existence of any form of bourgeois in a state, lends to weakness, depriving states of a "social anchor"} lack of internal unity

• In Europe representatives of the monarchy, the landed oligarchy, or the newly developing bourgeoisie, were either willing to bear part of the burden in order to protect themselves, or were able to impose that obligation on recalcitrant social sectors.

Poverty makes it extremely difficult to use taxes as a form of reliable and profitable income =>

weaker state } lack of consumption and steady labour, also barren, and sparse land

In Latin America, government debt did not encourage

the creation of a stable domestic financial market

If states cant "fight their respective elites"

then they can be seen as weak.

the most important impediment to the rise of  a more extractive state was that (with some exceptions)

no political institution was able to impose its dominance over the society during much of the 19th century.

A weak state e.g. Uraguay would lack "budgets, an accepted currency" and "the capacity to maintain order even in its own capital"

Revolts and regional violence deplete state power and strength

Bureaucracy

a system of government in which most of the important decisions are taken by state officials rather than by elected representatives.

Tilly on the state and war:

war made the state and the state made war

Traditional belief: War contributes positively to the institutional development of states

• Thesis challenges this notion, asserting that Latin American states did not develop as European states did due to differing historical contexts.

influencing factors in the relationship between war and state building:

• Availability of external resources.

• Level of prior institutional development.

• Nature of class alliances supporting the state.

European setting:

• Finer's "extraction-coercion" cycle: war in Europe necessitated monetary mobilization, leading to local state penetration.

• States developed taxation systems leading to institutional complexity even in peacetime.

• European wars catalyzed state formation due to ideological and structural readiness.

Latin America:

• Post-independence (1810-1830): States emerged amidst intense conflict without the required political structures in place.

• Wars largely resulted in destructiveness rather than institutionalized growth; examples include Peru (1880s), Mexico (1850s), Paraguay (after 1870).

wars and state taxes in Latin America

• Military Expenditures: Despite expenditures on military, Latin American states were unable to extract sufficient tax revenue from their populations.

• Customs revenue was highly relied upon as opposed to direct taxation.

• Tax Structures: Examples include Brazil and Chile where customs taxes comprised significant revenue, unlike the European model where domestic taxes were vital.

Latin American case studies

• Common Observations:

  • Frequent wars without significant state-building outcomes.

  • No substantial increases in domestic taxation systems following conflicts.

• Specific Instances:

  • Argentina: Developments were more robust post conflicts compared to earlier wars.

  • Brazil: Experienced internal conflicts but avoided state fiscal intrusion similar to Europe.

  • Chile: Gained from its emergence post-independence but still relied on export taxation rather than direct extraction from citizens.

The detrimental roles of wars

• War in Latin America often perpetuated a cycle of poverty and fiscal irresponsibility.

• Availability of external financing diminished pressure for domestic resource extraction.

• External Factors: External debts and commodities exports shaped fiscal dependency, hindering state autonomy and class alliances.