State Formation and Bureaucratization : Evidence from Pre-Imperial China

How does one build a centralized bureaucratic state? A dominant view is that wars incentivize rulers to directly extract resources, thereby increasing state capacity. The Chinese empire, one of the earliest states to develop a centralized bureaucracy, can provide useful insights. Using hand-collected data, I present the first systematic evidence on patterns of military conflicts and state-building in pre-imperial China. I then develop an incomplete contract model to study ruler's and agent's incentives at conflict, and demonstrate that ownership of land and type of military conflict both affect state-building. External military pressure dampens centralization, as land-owning agents have more to gain from a successful defense, and therefore are more committed to defense. Centralized districts are more aggressive at offense, as non-land-owning agents are more easily incentivized to participate in attacks. A decrease in agents' bargaining position also facilitates state-building. Empirical tests and historical examples are consistent with model predictions