Inheritance Systems and the Dynamics of State Capacity in Medieval Europe

We analyse how two different inheritance systems might affect the creation of centralised and administratively capable states. We use a multi-country overlapping generations model in which country rulers want to expand the lands they control by military conquests. An administration is required to raise taxes upon which partially fund an army. The characteristics of inheritance rules allow to identify two mechanisms that affect the creation and development of the administrative apparatus: the probability that lands stay under the control of the ruling family, which stimulates investments in state capacity; and marriages between heirs. If rulers prefer theirs lands to belong to their family, inheritance systems that privilege men over women encourage a direct development of the administration. On the contrary, gender egalitarianism generates more marriages between heirs because both genders will be equally represented in the marriage market. Countries originating from a marriage between heirs can benefit from higher taxation income due to an scale effect. To assess the importance of each mechanism, we simulate an economy under each (exogenously given) system. According to our results, inheritance rules that privilege men favour investments in state capacity in the long run compared to rules that give the same probability of inheriting to men and women.