The Cost of State-Building: Evidence from Germany

I would like to thank Lukas Althoff, Tim Besley, Christopher Browning, Katherine Casey, Melissa Dell, Armin Falk, Frederico Finan, Wolf Gruner, Nathan Nunn, Joel Mokyr, Torsten Persson, James A. Robinson, Jesse Shapiro, Andrei Shleifer, David Schönholzer, Edoardo Teso, Francesco Trebbi, Nico Voigtländer, Hans-Joachim Voth, Guo Xu, and Jonathan Weigel for helpful comments. I would also like to thank seminar participants at the Berlin Applied Micro Seminar, briq Institute, Berkeley, the University of Cambridge, the University of Chicago (Harris and the Institutions seminar), Columbia, George Mason, Harvard, the IOG group meeting at the University of Chicago, the Chicago Federal Reserve, New York University, Northwestern, the Norwegian University of Science and Technology, the University of Oxford, Stanford University, the University of British Columbia, as well as reading group participants at Zürich for helpful comments. I would like to thank Sofia Badini, Michael Giordano, Isabelle Hauf-Pisoni, Moritz Mendel, and Moises Pedrozo for valuable research assistance. Luis Calderon and Francesco Migliore provided outstanding assistance and feedback throughout this project. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.

• December 16, 2025