Capital Cities

10 years back, I wrote a blog post wondering why the capitals of many states of the US are not their largest cities. After writing that post, it occurred to me that the question ought to be reversed. Why should any state situate its headquarters in its largest city?

Usually, cities are capital cities for historical reasons. The historical reason is usually conquest. States were formed when powerful states conquered the less powerful ones. A powerful state was powerful because it ruled a land that was endowed with natural advantages like fertile land and plenty of water that enabled it to grow enough food to sustain an army. These natural advantages are also conducive to the growth of large cities that housed the capitals of these powerful states.

A king who shifted his capital away from the most powerful city in the kingdom would realise pretty soon that his new capital couldn’t support an army strong enough to control the kingdom, and the ambitious governor of the former capital is raising an army to overthrow him and declare himself the king.

Modern states do not face these constraints. They haven’t, since the advent of the telegraph and rail. Advances in transport and communication mean that a) control of the army is not dependent on proximity to it, b) the army doesn’t have to be close to the capital to protect it and c) the capital can be supplied with food and other necessities from far-flung areas.

All of these mean that there is no longer a need for the capital to be in a city that is a hub of commerce and industry. The capital can just be a company town, the “company” in question being the government.

If my reasoning is correct, then it makes complete sense that many states of the US have their capitals in places no one has heard of. These were some of the first political entities formed after the industrial revolution. The industrial revolution made it possible for them to establish capitals in remote locations. Note that it did not make it happen. It just made it possible. You could still choose to site your capital in the largest city, or you could choose not to.

These days, the causality is likely to be reversed. Rather than economic advantage causing a city to win the capital contest, it’s more likely that being the capital gives the city an economic advantage. If a city gets to punch above its economic weight by virtue of being a capital, it is indicative of the lack of economic freedom in that country. But we can broaden the idea and say that the greater the boost a city gets by virtue of being a capital, the poorer the overall quality of governance in that country.

I mean, we can agree that the government provides some public goods that enable economic growth. A libertarian would say that those necessary public goods are rule of law, policing, justice and good roads; a statist may believe that in a more active role for the government. But both of us can agree that if a government’s ability to provide the public goods it needs to provide ends at the borders of the capital, there is something seriously lacking in state capacity.

The best example of this is probably Hyderabad. During the Telangana agitation, I, as an outsider, provided a neutral shoulder at my office for both sides in the conflict to weep on. Both sides in the conflict actually agreed on the facts. While the Telanganaites complained that the Andhraites came to Hyderabad and dominated it, the Andhraites claimed that they were the ones who developed Hyderabad and therefore it was only fair that they were dominant in the city and unfair that they were now being pushed out. I learnt quite quickly that it wasn’t a good idea to argue with either side, but I couldn’t help asking the Andhraites the question: During all the years you controlled the politics of the state, why did you guys think that it was a good idea to develop the capital city hundreds of miles away rather than the cities in your region?

I never got a good answer to that question except a wistful “We made a mistake”

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