This paper exploits a quasi-natural experiment with the exogenous shock of capital relocation in ancient China from Nanjing to Beijing in 1421 CE during the Ming Dynasty, to investigate the relationship between political governance and urban systems. We constructed a unique historical panel dataset that measures population distributions among Chinese counties spanning over centuries. Using a difference-in-differences identification strategy, our results reveal that after the capital relocation, the effect of localities' distance to Beijing, the newly established capital at that time, on local population size turns to be significantly negative. Moreover, these effects still persisted in the next dynasty and modern China. Furthermore, the results indicate that the impact of the capital relocation on population distribution occur through two major channels of political governance: delivery and national security. The causal relationship between capital relocation and population distribution is demonstrated to be robust using a variety of identification strategies and robustness checks.
