World Happiness Report 2023 86 are an important common driver of all three kinds of state capacity. Moreover, building legal capacity and infrastructure will also support economic development and hence higher income. Political turnover The length of political horizons affects state capacity investments more in states that lack cohesive political institutions since such investments are more valuable to an incumbent group that expects to hold onto power rather than one that expects to be ousted. As incumbency brings greater control rights over policy, a wider set of policies is most valuable when a group can control their use. This suggests a positive link between political stability and state-capacity investments, as emphasized in Besley and Persson19. However, political turnover also interacts with cohesive institutions. An incumbent government constrained by cohesive institutions has more circumscribed control rights, and can therefore tolerate higher expected political turnover without compromising the incentive to invest. High political turnover is therefore likely to damage state-capacity investment the most when political institutions are non-cohesive, as the policies chosen by any incumbent will be less reflective of common interests. Traditionally, the best hope for state-capacity building was to have rulers with long time horizons. Ruling elites would have incentives to build functioning states not just to buttress their chances of staying in power, but to placate citizens who might otherwise grow concerned about political inequalities. In such cases, investments in state capacity become akin to investments in private capital. To pick an example among today’s states, some entrenched monarchies in the Middle East resemble family firms, with opaque distinctions between private assets of the ruling dynasty and collective state assets. However, political longevity is rarely a product of voluntary consent even though many elites try to foster benevolence myths - or appeals to divine rights - to justify their right to rule. But the reality is that state repression is almost always the tool used to maintain power. Such repression can wax and wane depending on events. For example, periods of high growth when the state can increase the quality of public services can stave off the need for intensive repression. But the threat of civil conflict is rarely far away if a substantial group of citizens decides to challenge the elite, either to establish local control over a particular terrain or the national state. The state may also face threat if a substantial prosperous and educated middle class emerges that demands political rights. Whether this results in greater repression or outright conflict is not so clear. But where it does lead to a prospect of conflict it can lead to greater political instability, with rulers reallocating resources from investments in state capacity to investments in coercive power. Norms and values In broad terms, norms and values comprise what is often referred to as “civic cultures.” A large body of work in political science and political sociology already stresses how norms and values may underpin state effectiveness.20 This research argues that norms and values may foster prosocial forms of behavior directly, or indirectly by coordinating beliefs on the benefits of prosociality. To be more concrete, norms and values may determine whether a public official will refuse to take a bribe, whether a citizen will pay her taxes, or whether she will obey the law. Similarly, norms and values about good citizenship may limit people’s willingness to use violence against fellow citizens. Those who wield coercive power may therefore serve as a check on state coercion as well as a propagator of it. The role of norms in regulating behavior came to the fore during the recent pandemic determining willingness to wear a face mask, to engage in social distancing, or to become vaccinated. In times of war, values may shape a citizen’s willingness to volunteer for active duty. Social norms can motivate people to seek occupations that stress selfless public service. Choosing to vote or to participate in political activities can also reflect socially oriented values.21 Some have argued that norm-following can arise purely from self-interest if individuals fear social sanctions or ostracism for disobeying a norm. Thus, politicians who pursue the public good may do so for purely self-interested reasons, because they care about their social reputations.
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