Commodity Shocks Ignited State Building After Mexico's Revolution

Elite Competition and State Capacity Development: Theory and Evidence from Post-Revolutionary Mexico

New theories suggest domestic elite competition can drive state capacity development. This piece explores post-revolutionary Mexico as a case study.

Context: During the tumult of the Mexican Revolution, commodity price shocks created opportunities for political consolidation.

• Rational Incentives: When elites faced financial crises due to these shocks, they gained power through asset expropriation.
• Survival Imperative: Consolidating authority became crucial to survive rival elite challenges.

Data & Methods:

• The study analyzes historical economic data from the Great Depression era and political outcomes in Mexico.

Key Findings:

• Negative commodity price shocks led to increased asset expropriation by victorious elites.
• These elites subsequently invested more heavily in state capacity, a trend that persisted into modern times.

Why It Matters:

This research reframes state capacity development. Instead of solely focusing on external threats like interstate rivalry or international wars, it demonstrates how internal political dynamics and economic crises can also fuel the expansion of state power.