One Road to Riches?

Building effective state institutions before introducing democracy is widely presumed to improve different development outcomes. Conversely proponents of this stateness-first argument anticipate that democratization before state building yields poor development outcomes. In this Element we discuss several strong assumptions that (different versions of) this argument rests upon and critically evaluate the existing evidence base. In extension we specify various observable implications. We then subject the stateness-first argument to multiple tests focusing on economic growth as an outcome. First we conduct historical case studies of two countries with different institutional sequencing histories Denmark and Greece and assess the stateness-first argument (e.g. by using a synthetic control approach). Thereafter we draw on an extensive global sample of about 180 countries measured across 17892019 and leverage panel regressions preparametric matching and sequence analysis to test a number of observable implications. Overall we find little evidence to support the stateness-first argument.