DT 14-26 Affective Political Alignment and the Development of State Capacity

State capacity is fundamental to economic development and effective governance; however, the political foundations of its long-term accumulation are not yet sufficiently understood. This article develops a dynamic political economy framework in which affective political alignment (APA) weakens the political benefits derived from government performance. As political support becomes less responsive to performance, governments have fewer incentives to make costly investments in state capacity, the political and institutional benefits of which only materialise gradually, leading to persistent underinvestment. This argument is tested using an unbalanced annual panel of 81 countries over the period 2000-2023. In both fixed-effects and two-step System-GMM specifications, higher APA is associated with lower subsequent aggregate state capacity, with the most consistent effects concentrated in administrative and legal capacity. The evidence on extractive capacity is less consistent across estimators and samples, whilst the measure captures only one component of the broader capacity for resource mobilisation. The Panel's local projections, meanwhile, provide further evidence regarding the long-term mechanism: increases in the APA are accompanied by persistent declines in aggregate administrative and legal capacity, rather than an immediate institutional deterioration. The article contributes to the analysis of the temporal evolution of state capacity by linking the affective structure of political competition to the incentives governing long-term institutional investment. Taken together, the evidence suggests that affective politics is not primarily associated with the dismantling of existing state institutions, but rather with weaker incentives to build up the administrative and legal capacities necessary for a government to consolidate an effective, predictable and durable system of governance.

State capacity; Affective political alignment; Political economy; Institutions.