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Leander Heldring (Northwestern): The Cost Of State-building: Evidence From Germany

Abstract: This paper studies the impact of a well-functioning bureaucracy on the effectiveness of repression, in the context of Germany’s Nazi regime. I compare former Prussian to non-Prussian municipalities within unified Germany in a regression discontinuity framework. When the Nazis persecuted the German Jews, Prussian areas implemented deportations of Jews more efficiently. During the Weimar republic, when Jews were legally protected, violence against Jews is lower in former Prussian areas. In both periods, Prussian local governments had greater ‘capacity’: They were more effective at raising taxes and providing public goods. Capacity derived from greater specialization and better information processing rather than from effort. Democratic oversight and less committed principals reduce, but not reverse, the effect of state capacity on repression.