Wars, Ethnic Fractionalization, and State Formation. Experimental Evidence from Early 20th century Switzerland

Does the salience of ethnic cleavages undermine the "war and state making" link? Existing research argues that war fostered the emergence of states with powerful extractive capacity in Europe. In other parts of the world, however, wars did not produce the same outcome because ethnic divisions undermined the centralization of taxation. In this paper, we provide evidence from an natural experiment to demonstrate the pressure of war is insufficient to supersede differences in support for state formation between majority and minority groups. More specifically, we employ a regression discontinuity design using a natural border that separates linguistic groups and municipality outcomes of popular votes on the introduction of direct taxation and centralization in Switzerland during and shortly after the First World War. The findings suggest that without sufficiently homogenizing the population or pacifying ethnic cleavages, wars are unlikely to expand the capacity of states for taxation.