War and public finances in the Ottoman Empire: A study on Ruznamçe registers

State capacity influenced economic performance by enforcing contracts, supplying public goods, and discouraging rent-seeking investment. Countries that built greater fiscal capacity in the early modern era later experienced higher incomes per capita. Scholars argued that the Ottomans fell behind contemporary European monarchies in fiscal expansion, but the evidence that supported this conclusion was sporadic. This dissertation revisits this hypothesis by constructing a new dataset of government-salaried army size for the Ottoman Empire in the first half of the eighteenth century. Based on an almost uninterrupted series of observations, I show that the Ottoman Empire responded to outbreaks of war efficiently. However, it did not invest in its peacetime standing army to an extent comparable to its European counterparts. Based on an analysis of the data, I argue that this was because the empire felt less intense war pressure. I also argue that war pressure adequately explains the divergences in fiscal income growth, and credible commitment accounts are redundant. I demonstrate the point in a dynamic principal-agent model.