State Capacity and Military Con ‡ict

Abstract In 1500, Europe was composed of hundreds of statelets and principalities, with weak central authority, no monopoly over the legitimate use of violence, and multiple, overlapping levels of jurisdiction. By 1800, Europe had consolidated into a handful of powerful, centralized nation states. We build a model that simultaneously explains both the emergence of capable states and growing divergence between European powers. In our model, the impact of war on the European state system depends on: i) the capital intensity of war (which stands for the …nancial cost of war), and ii) a country's initial level of domestic political fragmentation. We emphasize the role of the "Military Revolution", which raised the cost of war. Initially, this caused more internally cohesive states to invest in state capacity, while other (more divided) states rationally dropped out of the competition. This led to both increasing divergence between European states, and greater average state building on the continent overall

2012) Gender Gaps in Performance: Evidence from Young Lawyers , Barcelona GSE Working Paper Series, Working Paper nr 604

Abstract This paper documents and studies the gender gap in performance among associate lawyers in the United States. Unlike other high-skilled professions, the legal profession assesses performance using transparent measures that are widely used and comparable across firms: the number of hours billed to clients and the amount of new client revenue generated. We find clear evidence of a gender gap in annual performance with respect to both measures. Male lawyers bill ten percent more hours and bring in more than twice the new client revenue than do female lawyers. We demonstrate that the differential impact across genders in the presence of young children and differences in aspirations to become a law firm partner account for a large share of the difference in performance. We also show that accounting for performance has important consequences for gender gaps in lawyers' earnings and subsequent promotion. Whereas individual and firm characteristics explain up to 50 percent of the earnings gap, the inclusion of performance measures explains a substantial share of the remainder. Performance measures also explain a sizeable share of the gender gap in promotion

The Welfare Cost of Lawlessness: Evidence from Somali Piracy.” Working Paper

Abstract In spite of general agreement that establishing the rule of law is central to properly functioning economies, little is known about the cost of law and order breakdowns. This paper studies a specific context of this by estimating the effect of Somali piracy attacks on shipping costs using data on shipping contracts in the dry bulk market. To estimate the effect of piracy, we look at shipping routes whose shortest path exposes them to piracy and find that the increase in attacks in 2008 lead to around a 8 to 12 percent increase in costs. From this we calculate the welfare loss imposed by piracy. We estimate that generating around 120 USD million of revenue for Somali pirates led to a welfare loss in excess of 630 USD million, making piracy an expensive way of making transfers. * We are grateful to the editor, referees, Daron Acemoglu, Elhanan Helpman, Marit Rehavi and a number of seminar participants for useful comments and advice. We also thank Dieter Berg, Tilman Kratz, Richard Mcenery, Richard Neylon, and Neil Roberts for their many helpful insights into the workings of the industry. Ali Saadatnia and Alessandro Torti provided valuable research assistance. We thank the International Growth Centre (IGC) at LSE for financial assistance in collecting the data. For additional support, Besley thanks CIFAR and Martin Newson, Fetzer thanks the Konrad Adenauer Foundation and Mueller thanks Spanish Ministry of Economy and Competitiveness through the Severo Ochoa Programme for Centers of Exellence in R&D (SEV-2011-0075), from project number ECO2012-37857 and the Ramon y Cajal programme. Responsibilty for errors lies with the authors

Bill Zu and seminar participants at Darden School of Management

Abstract If there are diseconomies of scale in asset management, any predictability in mutual fund performance will be arbitraged away by rational investors seeking funds with the highest expected performance JEL codes: G2; G23