Why are certain states and regions able to deliver a wide range of public goods, while in others funds are either not raised, embezzled, or misallocated? This paper argues that, while societal heterogeneity or collective action by citizens may explain the incentive of political leaders to deliver public goods, their capacity to do so depends critically upon a third factor - the degree of historically accumulated state capacity. This argument is tested in the context of post-soviet Russia, which in the 1990s went through a dramatic transition from centralized rule from Moscow to decentralized fiscal administration and service provision. Using time-series data on public goods provision and a dataset of state history for 83 provinces of the Russian Federation, cumulative state formation is shown to be significantly and robustly associated with public service outcomes.
