Local ruling elites and historical origin of modern state capacity: Evidence from rural Japan

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How to explain the spatial variation in state capacity at the sub-national level? This study develops a historical explanation in which the relationship between traditional local ruling elites and the new central government leads to persistent differences in state capacity at the sub-national level. Using data from rural areas in Japan, this study finds that areas once ruled by daimyo who supported the new central government now have higher state capacity, and this result still holds even after accounting for spatial spillovers and making causal inference. Using the case of modern state-building in Japan, this study shows that the relationship between local elites and the central government in the early stages has a long-term impact on the expansion of state capacity.