In this Element, we investigate how economic geography, the
distribution of subnational economic endowments within a nation,
shapes long-run patterns of inequality through its impact on the
development of fiscal capacity. We present an argument that links
economic geography to capacity through different types of
industrialization processes. We show how early industrializers
shape spatial distributions domestically by investing in
productivity across their nations, and externally by reinforcing
spatial polarization among late industrializers. We also show how
differences in economic geography impact the process of capacity
building, setting the stage for the modern politics of
redistribution discussed in Volume II. We support this argument
with descriptive data, case studies, and cross-national analyses.
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