Why do some states thrive while others struggle?
Why do some countries develop strong institutions, stable economies and high living standards, while others struggle with weak governance and inequality?
These questions are at the centre of the research conducted by Victoria Gierok, newly admitted to the Pro Futura programme and affiliated with the Department of Economic History at the Lund University School of Economics and Management (LUSEM).
Her project explores how the foundations of strong states were built in early modern Europe – and how local institutions played a crucial role in shaping both state capacity and inequality.
Today, well-functioning states such as Sweden or Germany are often seen as key to economic growth and social stability. With effective legal and administrative systems, extensive infrastructure and universal public services such as education and healthcare, they offer their citizens a high quality of life.
But how did such states emerge in the first place?
Looking beyond the traditional explanation
For decades, a common explanation among economic historians has been that modern state capacity developed largely as a response to war. As warfare became more expensive, rulers needed stronger tax systems and administrative structures to finance their armies.
However, this narrative focuses mainly on top-down state formation, driven by rulers and central governments.
Victoria Gierok’s research takes a different perspective.
“My project investigates state formation from the bottom up,” she explains. “I want to understand how local institutions such as city councils, guilds and trading companies built administrative, legal and fiscal capacity long before modern states fully developed.”
These local actors, she argues, may have played a much larger role in shaping state institutions than previously assumed.
At the same time, the relationship between state formation, warfare and inequality is complex. In many cases, the expansion of state power during the early modern period also strengthened political elites and increased inequality – developments that could hinder economic growth and effective governance.
Another aspect that has received surprisingly little attention is the role of private actors in warfare.
“Given the central role of war in debates about state formation, my project will also examine mercenaries and military entrepreneurs,” she says. “They were important actors in early modern Europe, but their role in shaping state institutions has not been studied enough.”
A unique opportunity to deepen the research
Being admitted to the prestigious Pro Futura programme, funded by Riksbankens Jubileumsfond, will allow Victoria Gierok to pursue these questions in greater depth.
“I am very grateful to Pro Futura for funding my research,” she says. “The programme gives me the time and resources to conduct archival research that would otherwise not be possible.”
It also creates opportunities for international collaboration.
“Through the programme I will be able to work with researchers in Sweden and across Europe, which will help broaden my perspective and place my research in a comparative context.”
Understanding institutions in a changing world
Victoria Gierok’s research also connects to broader debates about institutions and economic development. In 2024, economists Daron Acemoglu, Simon Johnson and James Robinson were awarded the Nobel Prize for their work arguing that inclusive political and economic institutions promote growth, while extractive institutions lead to poverty and oligarchic systems.
Yet important questions remain unanswered.
“How inclusive institutions emerge and how they relate to state capacity is still not fully understood,” Gierok says. “At the same time, economic growth is often studied from an aggregate perspective without considering the role of inequality.”
By combining these perspectives, her project seeks to deepen our understanding of how early modern state formation shaped both economic development and inequality.
Lessons from the past
Understanding how states developed historically is not only relevant for historians. It can also offer insights into challenges facing societies today.
First, the research may shed light on how states with weak institutions can strengthen their capacity to raise revenues and provide public goods.
Second, the project speaks to contemporary debates about the role of the state in society.
Recent decades have seen a partial retreat of the “big state” in many Western countries as austerity policies reduced public spending. At the same time, private actors are increasingly taking on roles traditionally associated with the state – from private space exploration companies such as SpaceX and Blue Origin to private military organisations operating in global conflicts.
Meanwhile, rising income and wealth inequality in many countries may have far-reaching political consequences.
“While we should be cautious about drawing direct historical comparisons,” Gierok notes, “a better understanding of how state institutions developed and how they interacted with inequality can help us better understand current developments.”
LUSEM looks forward to following Victoria Gierok’s research in the coming years and the new insights it may bring to the study of state formation, inequality and economic development. And last but not least, congratulations Victoria and welcome to LUSEM!