Conceptualizing and Measuring State Capacity

Abstract

This paper proposes and quantitatively tests a measurement of state capacity using Robert Adcock and David Collier’s four-step framework. Drawing from the work of state-centered structuralists, rational choice-inspired theorists, as well as studies of the relationship between state and extractive capacity, state capacity is defined as the ability of the state to dominate, i.e. coax compliant behavior from, the individuals of a given territory and operationalized as tax compliance (as measured by the size of the shadow economy relative all legal economic activity). Large-n correlations as well as regression tests show that this operationalization has convergent and discriminant validity, as well as explanatory power. A paired comparison between China and India suggests that this operationalization is able to account for the differences in apparent governance capacity and development performance that other governance measurements cannot.