| Abstract |
Using newly available data on the universe of boundary changes for all European states over 1000-1850, we argue that competition between states leads to short-term losses and long-term gains in economic growth. In event studies, cities switching between states suffer large transitory losses in population but enjoy sustained population increases under new governance. We then use decomposition techniques to show that improvements in state quality occur both due to improvements of the pool of states over time as well as due to cities gravitating towards higher quality states. Parliamentary activity, fiscal capacity, and protection from predation mediate these effects.
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