The rise of modern states is an important factor for economic development. We test the effects of territorial consolidation and the increase in legal capacity on market integration. The political transformation of Germany in the wake of the Napoleonic Wars, which reduced territorial fragmentation and transformed former semi-autonomous estates to sovereign polities, serves as a natural experiment. We apply a difference-in-differences framework to a new dataset of grain prices and show that territorial consolidation reduced trade costs conditional on trade reforms that replaced heterogenous internal duties by a unified system of external tariffs. The effect was equivalent to a reduction of price gaps by 31 percent. Cities that were part of Prussia both before and after the Wars and experienced trade reform saw a reduction in price gaps of similar magnitude. By contrast, there was no market integration in late-reformer states such as Hanover and Saxony. Trade reforms were the main channel through which territorial consolidation fostered market integration.

现代国家的崛起是经济发展的重要因素。我们测试了领土合并和法律能力增加对市场整合的影响。拿破仑战争后德国的政治转型减少了领土分裂，并将以前的半自治庄园转变为主权政体，这是一个自然实验。我们将差异框架应用于新的谷物价格数据集，并表明领土合并降低了贸易成本，条件是贸易改革以统一的外部关税制度取代异质内部关税。其效果相当于价格差距缩小了 31%。在战前和战后属于普鲁士并经历过贸易改革的城市的价格差距都出现了类似幅度的缩小。相比之下，汉诺威和萨克森等改革较晚的州没有市场一体化。贸易改革是领土整合促进市场一体化的主要渠道。