Keywords

Mark Harrison’s research has shaped our understanding of how military strategic concerns, wartime spending, and coercion all influenced the state’s role in the economy in the twentieth century, particularly in the Soviet Union (e.g., Gatrell and Harrison 1993; Harrison 1998). Harrison’s work in this area touches on a broader scholarship, which argues that perceptions of external and internal threats tend to drive the consolidation of hierarchical control and the development of the capacity of central state authorities to collect taxes and enact policies down to the lowest levels of a society. Social scientists have come to consider this development of “state capacity” to be a key feature of political and economic modernization (e.g., Besley and Persson 2010).

Much of the literature on the rise of the early modern state focuses on the revenues and institutions under the control of newly empowered national parliaments or sovereigns (Brewer 1989; Dincecco 2011; Gennaioli and Voth 2015; Hoffman and Rosenthal 1997). Similarly, students of the rise of social welfare states in the later nineteenth and early twentieth centuries tend to emphasize political changes in central institutions and the consequences for revenue and spending policies (e.g., Lindert 2004). But to what extent was development of state capacity over the nineteenth and twentieth centuries only a story of central authorities imposing new, additional, or uniform taxes and administrative control on sub-national units? In the case of the Soviet Union, Harrison’s pioneering research has described the hierarchical principal-agent relationships that comprised the political and economic systems under Stalin’s ultimate control (e.g., Gregory and Harrison 2005). Similarly, Imperial Russia has often been characterized as a highly absolutist and centralized state, subject to the ultimate authority of the Tsar. However, in practice much of the actual governance of the vast empire was local. While state policies and institutions emanating from the center dictated the parameters under which local governments functioned, this chapter argues that a large and particularly influential part of Tsarist “state capacity” was produced and controlled at the sub-provincial level.Footnote 1

Prior to the emancipation of the serfs in 1861, local authority in the Russian empire was firmly in the hands of the landed elite, with only occasional interference by ministerial or military agents acting under central directives. With respect to the post-1861 period, scholars emphasize the failure of the absolutist state to fully centralize control, build robust legal institutions, or develop the capacity to (efficiently) collect revenues and provide economically beneficial public goods and services – i.e., to do precisely what other modernizing states were beginning to accomplish. To a certain extent, this view is true – although the central government was actively involved in supporting infrastructure development, engaging in trade policy, and moving Russia onto the gold standard, below we describe how it collected taxes in a relatively inefficient manner and provided relatively few non-military goods and services, especially ones that impacted the lives of the 85 % of the population who were peasants. However, such interpretations tend to ignore the “capacity-building” that characterized a number of local (sub-provincial) institutions of governance installed in the wake of serf emancipation. As we argue below, these varied forms of local self-government constituted a relatively rigorous form of decentralized governance that at least partially substituted for weaknesses of the central state and the demise of the landed elite.

In recent decades, attention has increasingly focused on decentralization as a mechanism to bypass inefficiencies and corrupt practices of central governments in low-income countries, although one that might lead to increased capture of resources by local elites (Bardhan and Mookerjee 2006). In some cases, decentralization might take the form of intergovernmental grants and the installation of direct central administrative authority at the local level. In other settings, decentralization involves the devolution of fiscal authority and governing powers to local actors. The latter case more closely resembled the Russian context, where peasant communal authorities, all-class representative bodies known as zemstva, municipal authorities, and other local institutions received certain legal rights and specific fiscal powers from the Imperial authorities that allowed them to fund a variety of local public goods and services. The resulting local “public sector” of Russia over the period 1860–1917 was a complicated network of ministerial offices, quasi-independent “overseers” of the peasant population, and various rural and urban institutions of self-governance. This chapter focuses solely on Tsarist Russia, but an underlying theme is that the activities and effects of local fiscal and political institutions in other societies over the long nineteenth century deserve greater attention from economic historians.Footnote 2

Standard accounts of Russian economic history over the period concentrate on Imperial policies emanating from St. Petersburg.Footnote 3 Ministerial decrees, large-scale reforms, and events in the capital cities certainly played a role in Russia’s development process, but their impact on the ground, and on the microeconomic decisions of individual actors, was mediated by the institutional structure of local government. This chapter sets out to accomplish two modest tasks. The first is to provide a very basic accounting of decentralized public sector “capacity” in Tsarist Russia in relation to the Imperial fiscal system and central political authorities. Second, we briefly interpret the resulting structure of local and central state capacity in a broadly comparative light. This second task hints at an underlying methodological concern of this chapter – although we only study the Russian case, this example can offer insights into state capacity, decentralization, and fiscal systems in developing countries and in the rise of the modern nation state. Given the speculative nature of the evidence and claims put forth here, it is very clear that considerable work remains to establish the role of local state capacity in the process of economic development in Russia and elsewhere over the long nineteenth century.

State Capacity in Imperial Russia: An Overview

Recent scholarship in political economy has fixed on the development of the means of enacting pro-growth policies as a critical step in the process of economic development. In practice, definitions of this “state capacity” tend to focus on central authorities. Studies such as Dincecco and Katz (2016) document state capacity as per capita central government revenues (extractive capacity) or non-military spending (productive capacity).Footnote 4 Besley and Persson (2010) consider various measures of legal capacity, such as protection of property rights and financial development, and of fiscal capacity, including the amount of non-tariff revenues and various types of taxes imposed by central governments. Here, we primarily focus on fiscal dimensions of state capacity in the Russian context, with brief sidebars on legal and “infrastructural” measures.

In various works on the Tsarist transition to modern economic growth, Paul Gregory de-emphasized the role of the state’s fiscal practices in overcoming various limitations of Russia’s economic backwardness. Gregory’s (1982—also see Table 1) NNP estimates suggest that that the share of total government spending (excluding capital investments) was relatively large in fluctuating between 8 % (644 million rubles) in 1885 and 11 % (2.2 billion rubles) in 1913, although he strongly argues that total spending may not have translated into a large role for the central government in the development process. Gregory noted that the share of military spending in total government expenditures was quite large over the period – 45.6 % in 1885 to 44.9 % in 1913 – and that this, along with other aspects of the state’s involvement in the economy, did very little to improve the allocation of resources, generate additional investment, provide public goods, or spark innovation.

Table 1 Russian state capacity in comparative perspective
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Figure 1 summarizes Russian central government spending over the period 1804–1913. These data are based on amounts spent through Tsarist ministries, with some extraordinary expenditures included.Footnote 5 As such, any categorizations miss relevant expenditures that occur through largely unrelated ministries (e.g., educational expenditures taking place through the Holy Synod). Overall, while changing values of the ruble are obvious concerns, spending picks up after 1870. The share of non-military expenditures slowly increased, although our measure likely understates military spending (defined as the sum of spending by the army and naval ministries). Expenditures on internal governance (mostly through the Ministry of Internal Affairs) hovered between 5 % and 10 %, while Ministry of Education spending never consisted of more than 6 % of the central budget.

Fig. 1
figure 1

Central government spending, 1804–1914. Note: The percent of non-military spending excludes naval, army, and extraordinary expenditures explicitly earmarked for military purposes. The percent of “Internal” expenditures includes ordinary spending earmarked for the Ministry of Internal Affairs and the postal system. The percent of expenditures on education refers to the Ministry of “Enlightenment,” exclusively, although educational spending did occur through other ministries. Non-military spending includes Education and “Internal” expenditures. The data from 1804 to 1902 come from Rozhdestvenskii, ed. (1902). The remaining years of data are drawn from the relevant Yearbooks (Ezhegodniki) of the Ministry of Finance. Except for the years 1905 and 1914, all of these data represent actual expenditures rather than budgeted amounts

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Fig. 2
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Shares of central government revenues. Note: All series represent percentages of total central government revenues, which include ordinary, one-time, and extraordinary (overwhelmingly debt financed) revenues. “Direct Taxes” includes the soul tax, land taxes, taxes (patents) on trade rights, and industrial profit taxes. “Indirect Consumption Taxes” include various sales taxes, including excise taxes on alcohol, salt, sugar, tobacco, oil, and other commodities. “Total Alcohol Revenues” include the same alcohol excise tax AND (after 1895) direct production revenues and retail sales. “Debt/Extraordinary” revenues are almost entirely foreign and domestic bank loans and bond issues. The data sources are the same as in Fig. 1

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The more commonly used indicators of state capacity lie on the revenue side of the budget. Of course, total revenues including debt financing closely paralleled the long-run rise in expenditures. However, the composition of these revenues changed in important ways over time. Figure 2 presents such information. Overall, the bulk of central revenues between 1864 and 1914 came from indirect taxes (mean of 25.6 %), tariffs (10.6 %), and, especially, alcohol taxes and sales (27 %).Footnote 6 Direct head (soul), property, and industrial property taxes only comprised 11.2 % of total revenues over this period, with debt payments constituting a volatile but significant share at 11 %.Footnote 7 Significantly, most direct taxes were imposed collectively at a relatively high level (typically), with the subsequent allocation to lower units determined largely at the local level (from zemstvo on down), who included their own obligations alongside the central government’s demands (Kotsonis 2014).

To make comparisons to the broader literature on state capacity, these revenue numbers should be scaled by the size of the Russian economy. Gregory’s NNP numbers (and government spending shares) are available only for the period 1885–1913. Therefore, we limit our comparisons in Table 1 to just 3 years: 1885, 1900, and 1913. Over those 3 years, Russian state capacity as measured by central government revenues relative to NNP rose to the highest level among comparable European economies (17 %). As reflected in Fig. 2 as well, this rise was largely dependent on indirect sources – excise taxes, tariffs, and alcohol revenues. Thus, while the Tsarist state did appear to possess considerable revenue-getting capacity, there was little reliance on more structured sources emphasized by Besley and Persson (2010). Indeed, discussions of broader income taxes went nowhere before 1917 (Lindert and Nafziger 2014), although there were some inroads into business and corporate income taxation (Kotsonis 2014). Moreover, the record of Tsarist central government revenues may be misleading if the main center of Russian state capacity resided in the institutions of the local public sector, which we now move on to describe.

Institutions of Peasant Self-Government

The bottom rung in the Tsarist governance structure comprised the institutions of local peasant self-government: the new versions of the commune (the “rural society,” or sel’skoe obshchestvo), the township administration (volost’noe pravlenie), and associated township courts and local police, which all received formal stature in the emancipation reforms of the 1860s (Gaudin 2007). Informal versions of such institutions had existed for hundreds of years, and an enormous historiography describes the commune and communal governance across space and time before 1861.Footnote 8 Earlier reforms of the state (non-serf) peasantry in the 1830s established a nested township-commune system and prescribed a set of responsibilities, such as the maintenance of grain stores, the collective fulfillment of external taxes, and the execution of so-called “natural” obligations that included supplying recruits and upkeep on local roads. This served as a model for a common structure of peasant self-government established over much of the empire after 1861.

Peace mediators (mirovye posredniki) and new district and provincial administrations of peasant affairs (krest’ianskoe po delam prisutstvie) under the Ministry of Internal Affairs managed the process of setting up these institutions of self-government. Townships were supposed to include no more than 3000 (male) souls, and so the underlying number of constituent rural societies varied widely across Russia from one to dozens. Decisions made by peasant communes and townships emerged out of meetings of “representatives” of the peasant population that were presided over by elected elders.Footnote 9 Communal elders, township elders, township clerks, and other employees of peasant local governments comprised the bottom layer “officialdom” in Tsarist Russia. State and zemstvo officials often called upon them to execute policies and to report on local conditions. Critical to these efforts were paid police deputies (sotki and desiatki) selected from among the peasant population. In 1880, there were approximately 10 such local police per 1000 rural residents across European Russia (Russia Ministerstvo vnutrennykh 1881).Footnote 10 These were in addition to locally stationed, MVD-employed constables and their staffs.

Table 2 Township and communal expenditures in 1881
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The newly formalized peasant communes and townships could also assign local “taxes” (mirskie sbory) on members to hire staff and support a variety of other public goods and services. Such collections were often made alongside external obligations to the zemstvo and central government, with the rural society collectively liable for submitting payments two times per year. Townships and rural societies also managed grain stores and cash funds, making loans and imposing supplemental collections when necessary.Footnote 11 In the absence of debt markets or credit supplies, revenue and expenditure totals of these bodies were essentially equal, year-by-year. Focusing on the latter, Table 2 reports spending by peasant institutions in 1881 (1905 data show a similar pattern). Salaries for clerks and elders and the maintenance of structures, offices, and horses took up much of township spending in 1881, and a similar distribution – although focused on somewhat different public goods, especially schools – is evident for rural societies (not fully reported here).Footnote 12 Especially telling is the wide variety of activities that these local institutions could and did engage in. Moreover, many in-kind services such as local fire protection and the organization of customary law courts are not indicated in these budget totals.

Figure 3 explores the geography of spending by these institutions in 1881. While the levels were not terribly high (0.26 rubles per [rural] capita by townships; 0.31 by rural societies), township spending was relatively greater in the non-zemstvo (see below) region, while rural society spending was higher in the provinces to the north and east of Moscow. The former likely reflected additional obligations in the absence of the zemstvo in the western provinces. Overall, these maps indicate considerable variation in the level of activity undertaken by these local institutions, the implications of which have yet to be explored.

Fig. 3
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Rural society and township spending per capita, 1881. Note: The source – including the underlying population totals – is Russia, Tsentral’nyi (1883)

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The mirskie sbory, allocated along with shares of external obligations among households by the communal and township assemblies (often by the number of “obligated souls”), constituted the main but not only source of funding for these institutions. Table 3 provides some indication of this, as “other” sources constituted approximately 25 % of total revenues in Morozov township (Moscow province). Archival evidence suggests that many peasant institutions built up cash “communal capital” (mirskie kapitaly – often from the sale or rental of communal assets) on deposit at local financial institutions or with the township, and that these assets generated returns. Rural societies could rent out portions of the land received in the emancipation settlements, and they could charge for the right to run drinking and eating establishments. Township authorities collected fees for issuing work and travel passports to the local population.Footnote 13 Total fiscal demands (excluding any in-kind or labor obligations) placed on members by rural societies and townships tended to be less than external state burdens, but this locally generated “capacity” did support schools, local policing, and other public services to an underappreciated degree.

Table 3 Rural societies in Morozovskaia Township, Dmitrov Fistrict, Moscow Province – 1892
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The Zemstvo

At noon on October 23, 1883, district zemstvo executive committee chairman A.P. Fedorov and 31 assemblymen filed into the district courtroom in the town of Ardatov in Simbirsk Province to decide on a series of budget issues and to vote over a new executive for the next 3-year term.Footnote 14 With the issuance of the Statutes on Provincial and District Zemstvo Institutions in 1864, Tsarist reformers explicitly viewed such assemblies – comprising representatives of urban, rural, and peasant communal property owners – as constituting a mechanism for all-class self-government in the 34 (eventually 40) provinces of European Russia where they were established.Footnote 15 Under the law of 1864 (comprehensively revised in 1890), different types of property owners – private, urban, and peasant communal – were assigned specific numbers of seats in each district zemstvo assembly.Footnote 16 By providing for explicit representation from the peasantry, the zemstvo was at least partially intended as a way to deal with rural needs that might have exceeded the capabilities of the local institutions of peasant self-government.Footnote 17

The initial act required the zemstva (pl.) to finance other local institutions (such as district courts above the township ones), to manage military provisions and grain stores, to maintain roads and communication networks, and to aid in the collection of taxes for the central government. In addition to these “obligatory” responsibilities, the founding statutes called on the zemstva to undertake programs to support “the local economic and welfare needs of each province.”Footnote 18 Over the following half century, this mandate led to substantial zemstvo involvement in the expansion of rural education and health care, in the support of local artisans and craftsmen, in encouraging credit and cooperative organizations, and in providing veterinary and agronomic services to farmers.

The scale of the zemstvo’s growing role in public health and education is suggested by the increasing expenditures noted in Table 4 and by the decomposition of aggregate zemstvo expenditures in 1883 in Table 5.Footnote 19 Even considered in isolation, the expenditures depicted in Table 5 suggest that in the provinces where provincial and district-level zemstvo existed, they were key components of local government. We depict the geography of zemstvo expenditures per capita in 1906 (the picture for revenues per capita is similar) in Fig. 4. There was considerable variation in zemstvo spending across districts, expenditures were slightly higher in northern and northeastern provinces, and the level of spending per capita was roughly of the same magnitude as spending by the local institutions of peasant self-government.

Table 4 Total zemstvo revenues and expenditures, select years
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Table 5 Total provincial and district zemstvo expenditures in 1883
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Fig. 4
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Total zemstvo expenditures per capita, 1906. Note: These data sum over provincial and district zemstvo expenditures. For the sources, see Nafziger (2011). The map of revenues per capita looks almost identical. The underlying population totals only refer to the rural population

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After meeting for 3 days, the Ardatov district zemstvo assemblymen were ready to hear final reports on issues ranging from the ongoing construction of a village school to the zemstvo’s activities in road maintenance over the past year. Two pieces of business were especially important. First, the assembly heard a report on the planned budget for 1884. The proposed budget projected 81,521.15 rubles in revenues for the 1884 calendar year, 65,140.68 (79.9 %) of which derived from a tax of 12.08 % on the estimated (yearly) income generated by land and other “immovable” property in the district.Footnote 20 Across European Russia, property owners complained about such tax assessments, and the zemstva were forced to rely on local police, urban officials, and peasant governments to aid in the collection of zemstvo, state, and local obligations.Footnote 21 According to the law, zemstvo obligations received a lower priority than did direct state taxes (referred to in the zemstvo documentation as kazennye sbory, which included soul, land, and other direct taxes) in the final allocations.Footnote 22 Beyond property taxes, zemstvo also held the right to collect payments for trade and commercial rights, for the usage of zemstvo property, and for various services that they provided (including medical care). However, as Table 4 indicates, property taxes contributed roughly 70 % of total revenues throughout the period across all zemstvo. Only towards the end of the period did grants from the central government constitute any substantial part of zemstvo revenues.Footnote 23

After the budget was approved by majority vote, the Ardatov assembly came to their second piece of important business: voting over executive positions for the 1883–1886 electoral period. These included a new executive board chairman, new executive board members, two zemstvo representatives to the district school council, and nine representatives to the Simbirsk provincial zemstvo assembly. After a long series of nominations and votes, Filipp Mikhailovich Mikhailov, a peasant, was elected as the executive board chairman, two other peasants – Mikhail Timofeevich Diagilev and Petr Vasil’evich Turgenev – were voted in as the other members of the executive committee, and peasants filled all nine district representative positions in the provincial assembly. As a result, executive power in the Ardatov zemstvo lay entirely in the hands of the peasantry, even though by statute the peasant electoral curia only comprised 23 of the 52 seats in the district assembly. This contrasted with most other zemstva, where election outcomes in 1883 tended to reflect the weighting of assembly seats toward the curia of rural private property owners (and the nobility).

Ardatov’s zemstvo had a relatively large share of peasants elected to positions of authority, and the district seems to have spent a comparatively large share of its budget on health care and education. At the same time, the mean zemstvo tax rate on the 51 % of district land that was communally owned was 24.3 kopeks per desiatina (2.7 acres) in 1885, versus 22 kopeks for the 32 % of land in private hands, despite grain yields being higher on privately owned land.Footnote 24 Comparing 1883 data on electoral outcomes to the 1885 tax data and other information, we can more formally evaluate whether there was a relationship between peasant political power in the district zemstvo and the gap in tax rates between the two types of property (see Nafziger 2011). The econometric results indicate that the districts where peasant assemblymen achieved more political power showed lowered property tax gaps. However, we cannot entirely discount the possibility that those districts where peasants received a greater political voice had some unobservable characteristics that were correlated with differences in land quality between the two types of property.Footnote 25 What does seem to be clear is that the zemstvo assemblies and executive committees were quite active in fostering fiscal capacity that reflected and catered to local needs.Footnote 26 Among other effects, these investments translated into real improvements in school provision in the countryside in the absence of substantial involvement by the central authorities until very late in the period.Footnote 27

For the non-zemstvo provinces of European Russia, some of the zemstvo functions were undertaken by the local institutions of peasant self-government, often in concert with the local offices of peasant affairs and other representatives of the central government. However, officials under the direct authority of the provincial governors made the majority of local funding and revenue decisions in these districts.Footnote 28 In 1905, the Ministry of Finance recorded 24.5 million rubles in zemskie revenues in the non-zemstvo provinces, with over half (14.5 million) of the receipts from local property taxes and roughly two million in direct grants from the central government.Footnote 29 Overall, the fiscal and governance structure of the non-zemstvo provinces deserves further attention.

Where they existed, the zemstvo amounted to a form of “decentralization from scratch,” installed as a mechanism to build local state capacity and to translate the resulting resources into local public services. The peasant institutions of self-government played an important role as the locus for electing peasant representatives to the zemstva, while also functioning as an independent base of local state capacity on their own. Thus, while the central authorities were not completely absent, it is clear that a significant share of funding for local public goods in rural European Russia was locally collected and controlled.

Local Corporate and Municipal Governance

Social classes other than the peasantry also maintained their own local institutions of self-government. These included merchant guilds, district assemblies of the nobility, and townsmen (meshchane) associations. While their roles ebbed over the late Imperial period, these bodies continued to be called upon to administer aspects of local governance and contribute (often charitably) to schools and other public goods and services.Footnote 30 In this sense, these institutions did contribute to the building of formal state capacity at the local level. Unfortunately, budgetary information from these bodies is largely unavailable, as accounting was typically informal, and records were rarely kept. As such, the relative importance of these institutions in the system of Tsarist local governance remains largely unknown.

While the Russian Empire remained overwhelmingly rural, urban governments were an increasingly important part of the state structure over the last decades of the Tsarist era.Footnote 31 Assemblies and mayoral forms of urban governments were allowed in formally chartered settlements, and after reforms in the 1860s, such town authorities held the right to assess taxes on urban property, to collect certain fees and patents, and even to issue debt. Funds went to support local administration, schools, public health, and welfare provision of various types. By 1912, urban governments were spending approximately 275 million rubles, which is comparable to the aggregate expenditures of the zemstvo.Footnote 32 As Table 6 indicates, the majority of the associated revenues came from property taxes and various fees charged to urban enterprises and users of public services. The implication of such evidence – evident for earlier years as well – is that considerable local state (fiscal) capacity emerged in cities to match what the zemstvo and other rural institutions were doing.

Table 6 Urban government revenues and expenditures, 1912
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Central State Capacity at the Local Level

I touch on only a small number of issues here. Further work is necessary to fully document the interrelationship between central and local state capacity in this period. For some general insights in English, see Waldron (2007, Part 2) and Yaney (1973, esp. Chap. 9).

The central authorities were not completely absent from local governance. Although scholars (e.g., Starr 1972) do assert that the central government employed relatively few officials outside of the provincial capitals, the truth was far from Nikolai Gogol’s government inspector, whose visit to the provincial town was so unexpected that it caused pandemonium among local residents. In practice, a variety of state officials impacted the workings of the institutions of local government on a day-to-day basis. The politics and policymaking of the zemstvo and the peasant institutions of self-government were embedded in a complex structure of centrally controlled judicial and supervisory authorities at the district and provincial levels. These included the peace mediators that managed the emancipation process (Easley 2008); governors, police, and other administrative bodies under the Ministry of the Interior; local treasury offices; district courts and justices of the peace; and the land captains (zemskie nachal’niki – after 1889). The funding for such entities came from a combination of retained local sources and transfers from the central ministries, although it has proven impossible to credibly identify the local components of Ministerial budgets.

The most prominent “local” officials were the provincial governors and their staffs.Footnote 33 These appointees of the central government possessed significant executive power (including the authority to call out troops) but no direct independent control over the level of taxes or legal capacity in their provinces. Moreover, they controlled no specific budget to fund local public goods and services. However, they did possess final approval over zemstvo budgets and policies, a right that was strengthened in 1890, and they could employ police power to intervene in other local institutions.Footnote 34

The district and provincial offices of peasant affairs (krestian’skie po delam prisutstviia) were one of the most prominent state authorities in rural areas. Formally under the Ministry of Internal Affairs, these offices were established in 1874 to take over some of the functions of the peace mediators (PSZ, 2nd series, vol. 49, no. 53678). Staffed by a combination of local residents and appointees from the center, they were responsible for monitoring the activities of the zemstvo and the rural societies and townships to make sure statutes were followed, for responding to complaints from peasants about the functioning of those institutions, for communicating dictates from central authorities, and for managing the electoral processes for the zemstvo and peasant institutions. Pearson (1989) notes that a key role of these bodies was to monitor the collection of different levels (mirskie, zemstvo, or central) of assessed property taxes. He also argues that over time these offices saw their roles grow as part of a larger effort aimed at imposing greater state control over the countryside.

A related component of this conservative retrenchment of central state authority over was the creation of the position of the rural land captain (zemskii nachal’nik) in 1889.Footnote 35 These officials, who were overwhelmingly members of the landed nobility, were nominated locally by assemblies of the nobility, approved by governors (or appointed by central authorities), and paid a salary by the Ministry of Internal Affairs. By the early twentieth century there were almost 2500 land captains in 43 provinces. Initially, these officials held almost complete authority over the townships governments and courts, including the possibility of imposing fines, imprisoning people, and even enacting corporal punishment. Over time, additional responsibilities were added, including administrative duties during the Stolypin land reforms of the early twentieth century. Answerable to governors and the Ministry of Internal Affairs, the land captains constituted an extension of central control into the countryside, but they held no fiscal authority of their own.

Critical to the work of the Offices of Peasant Affairs and the land captains were local police under the control of central authorities. Unlike deputies nominated and funded by the peasantry, the rural constables (ispravniki) and their staff were hired and paid by the Ministry. One of their main responsibilities was to help execute the allocation of external tax obligations among peasant communities, industrial establishments, and other local paying units. This occurred under the direction of district offices of the Ministry of Finance, the zemstvo, and municipal authorities. In this capacity, these police were also responsible for collecting tax arrears, which occasionally necessitated the forced sales of taxpayer assets and other punishments.

As hinted at above, reforms over the late Imperial period revised the degree to which outside authorities intervened in programs and budgets of the zemstvo and other institutions of local self-government. This included changes in the rules governing local levies and measures that shifted obligations for particular public services between different components and levels of the broader public sector. Overall, it is clear that the central government took an increasingly active interest in the provision of local public goods, especially after 1890, corresponding to the large increase in the size of the central government’s budget in the last three decades of the Tsarist era (see Fig. 1).Footnote 36 Roadwork and other infrastructure improvements (including many private railroads) were eventually taken over by the state, as was troop quartering and the coordination of much local food relief efforts (particularly after the famine of 1891–1892). The Ministry of Education took an increasingly active role in supervising the system of primary education, culminating in a 1908 law that committed the state to the idea of universal primary education.Footnote 37 Similar central government efforts at local economic development emerged in the last three decades of the Imperial era in other areas, from agronomy to public health, but these were relatively limited and never completed abrogated the role of local actors capitalizing on local state capacity.Footnote 38

Further Perspectives on Local State Capacity in Tsarist Russia

The previous sections have documented a complex structure of local governance in late-Tsarist Russia. Compared to the pre-1861 period, the formalization of the peasant institutions, coupled with the creation of the zemstvo and reforms of urban governance, led to a considerable increase in locally produced state capacity. The ability of different institutions to collect revenues increased substantially, which led to an increase in the provision of various public goods and services. Eventually, the central government acted to develop a greater presence at the local level, although this occurred relatively late and may have substituted, in part, for what was already occurring locally.

To give an idea of scale, total zemstvo (provincial + district) spending rose from approximately 4.4 % of central government spending in 1874 to just over 8 % in 1913 (Nafziger 2011). These expenditures were increasingly concentrated in health care and education.Footnote 39 Add to that the rising capacities of the peasant institutions and urban governments, and it appears that much of the process of “state formation” was taking place outside of the orbit of the Petersburg Ministries and their local offices. Of course, this implies nothing about the efficiency by which revenue, legal, and infrastructural capacities were being built at any level. Indeed, the central government remained reliant upon less efficient indirect taxes that required less administrative capacity.

Regarding direct taxes, the state, peasant institutions, and the zemstvo may have competed for the loyalties and the tax dollars of the rural population as this process of local capacity building occurred.Footnote 40 The different levels government had a common primary tax base –assessments made on land and other forms of “immovable property.” In terms of rural land, the state held about 110 million, peasant rural societies 120 million, and private owners roughly 100 million desiatiny (2.7 acres) subject to tax assessments in European Russia in 1905 (Loganov 1906). Urban properties and fixed capital constituted the other main direct tax bases. By 1905, the zemstvo, municipal governments, and local agents of state ministries had made considerable investments to determine the income-generating possibilities of different types of property held by different owners in different locations (Kotsonis 2014). At the bottom level, the multi-layered tax system relied on the principle of collective liability among peasant institutions and urban property owners. Although rates imposed by central and local authorities were set separately, the underlying base was valued in common, while collection was undertaken simultaneously as one assessment. As such, we can ask whether levies made by central authorities took priority in the building “capacity” in this context.

To examine this, we turn to data on the land-related obligations faced by the peasantry of European Russia in 1895.Footnote 41 On average, such peasant households held approximately 10 desiatina of land (c. 1905). With this in mind, Table 7 reports information on mean total land taxes per desiatina, as well as a breakdown by the type of assessment. Because we do not have exact information about the burdened population, we focus on the taxes per desiatina, although this obviously conflates land quality and tax burdens. The overall level of obligations was about 1.4 rubles per desiatina, with the majority owed to the central government, followed by the zemstvo and then the peasant institutions. The map depicted in the top of Fig. 5 shows two areas – right-bank Ukraine and the central agricultural provinces – that possessed considerably higher levels of land obligations.

Table 7 Peasant obligations and arrears for land-based direct taxes, 1895
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Fig. 5
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Total direct tax obligations and arrears among the peasantry, 1895. Note: Figures drawn from data presented in Nafziger (2014). The amount of “obligated land” was defined in the original source. Payment arrears are defined as the accumulated amount relative to the year’s assessment for 1895

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Arrears on these land taxes accumulated to roughly 76 % of the 1895 assessment, which we view as quite low given the roughly 30 years over which this occurred. The bottom panel of Fig. 5 indicates that the districts along the northern Volga and to the northwest of Moscow had accumulated greater tax arrears by 1895. What is most telling is that the level of such non-payments appears to have been greater for the central government’s demands and smallest for the rural societies. This suggests that local monitoring and the possibility or perception that closer levels of government provided more beneficial spending may have driven peasant payment strategies. While this evidence is certainly not definitive, it does illustrate the importance of considering the fiscal structures and capabilities of both central and local authorities in the Imperial Russian context.

Comparative and Conceptual Dimensions

Was the Russian case anomalous for this period? What was the nature of local state capacity building in other countries of Europe? The rich data that we have explored in this chapter are not easily accessible for other countries. Standard sources of fiscal information, such as Mitchell (1998), stick to central government revenues. Furthermore, important accounts of the emergence of the franchise and the modern social welfare state also emphasize the corresponding fiscal policies of central governments (e.g., Aidt et al. 2006; Dincecco 2011; Lindert 2004; Lizzeri and Persico 2004). A few recent works have delved into specific components of local government activity in other societies, but for the most part, these studies do not emphasize the diversity of local entities, nor do they discuss the fiscal interactions between the center and locality.Footnote 42

Moving slightly farther afield, recent empirical studies have investigated how the outcomes of decentralizing reforms in developing economies may be affected by the structure of local political institutions. Increasing the political voice of previously underrepresented groups (such as women, ethnic minorities, or lower social classes) can have significant effects on the amount and allocation of local public spending.Footnote 43 The impact of a decentralizing reform depends crucially on how an increase in the nominal political voice of a group is translated into real political influence through local institutions. In the Russian case, the newly empowered peasant institutions of self-government and municipal bodies were forms of decentralization, as was the creation of the zemstvo. Furthermore, achieving just minority positions by the peasantry in the zemstvo assemblies appears to have fostered opportunities to propose policies, obtain agenda-setting executive positions, and ally with elements of the other property owners to push through spending proposals (Nafziger 2011). All of these measures likely brought local spending and revenues more in line with the preferences of local residents, while possibly improving local accountability and leading to an increase in total public sector activity.Footnote 44

Examining the Russian case suggests a modified approach towards the development of state capacity over the long nineteenth century. Rather than just focus on the political economy issues at the level of the central government, it is necessary to consider the entirety of the edifice that comprised the state from the top on down. Specifically, a fuller examination of the state’s role in the transition to modern economic growth would consider spending policies of local governments. This naturally requires some consideration of the interrelationship between the center and the locality, whether in the form of fiscal federalism (Oates 1993), a decentralization or devolution of fiscal authority down the hierarchy (Bardhan and Mookherjee 2006), a structure of inter/intra-governmental grants, or in a strategic framework (e.g. Acemoğlu et al. 2014).Footnote 45

Concluding Thoughts

Mark Harrison has constructed an influential narrative about how military strategy, armament production, and repression were critical drivers of the modern state’s role in the economy, particularly when it came to developing the capacity to extract resources from the population. While Mark’s work has focused on the Soviet period, military spending was an enormous part of the central government budget in Imperial Russia over the long nineteenth century, and external conflict and the threat of internal unrest surely did shape the development of the central authorities’ fiscal and legal capacities (Pinter 1984). This paper argues that an exclusive focus on state formation as entirely a project of the central authorities misses an important local component, both in the Russian context and in European history, more generally.

In the case of Tsarist Russia, reforms in the wake of serf emancipation decentralized important fiscal and legal rights to a number of local institutions. This allowed for a significant amount of state capacity to be developed locally, rather than the central government simply imposing its policies and tax obligations. In providing some illustrative empirical evidence on just what these processes entailed, we do not want to oversell this point – as Tables 1 and 7 implied, central state direct and indirect obligations were considerably larger than those imposed by the local governments. However, much of this went to fund military and coercive aspects of the absolutist regime, rather than towards economic goals. It was left to the peasant institutions, municipal governments, corporate entities, and the new zemstvo to construct the capacity for most local public goods and services. While other scholars have begun to examine similar developments in Europe and the United States in the long nineteenth century, there is a large need to collect more and comparative information to better understand whether this locally produced capacity was a robust phenomenon. Nevertheless, bringing the local into the story of the rise of the modern nation state is an important task for economic historians, one that I am sure Mark Harrison would appreciate as well.