That is a recent paper by Scott Abramson of Princeton (headed to Rochester), here is the abstract:
This paper challenges the long standing belief that changes in patterns of war and war-making caused the emergence of large territorial states. Using new data describing the universe of European states between 1100 and 1790 I find that small political units continued to thrive well into the “age of the territorial state,” an era during which some argue changes in the production of violence led to the dominance of geographically large political units. In contrast, I find evidence that variation in patterns of economic development and urban growth caused fragmented political authority in some places and the construction of geographically large territorial states in others. Exploiting random climatic variation in the propensity of certain pieces of geography to support large populations, I show via an instrumental variables approach that the emergence of towns and cities caused the formation of small and independent states. Last, I explore how changes in economic forces interacted with patterns of war-making, demonstrating that the effect of urban development was greatest in periods associated with declines in the costs of producing large-scale military force.
Here is Abramson’s forthcoming book on that same topic., summarized here:
Under what conditions do some political units expand and others contract? Why do some fail and others persist? In which periods should we expect universal empires and why in others systems of states? My dissertation answers these questions by explaining variation in the number and size of the basic unit of political life, the state. Using a combination of formal, statistical, and historical methods, this book length project explores the origins of the territorial state between 1100 and 1789. I first develop a game theoretic model of state formation that captures both war-making and economic constraints on state-makers. The theory’s implications are then empirically tested through a series of quasi-experimental research designs and historical case studies. While many macro-historical accounts highlight the consequences of changing patterns of war and war-making for processes of state formation, this book argues that these effects have been overstated. Rather, I show that changes in economic geography caused variation in the number and size of states across both time and space.