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Between the 15th and 18th centuries, nomadic raids in the Black Sea region led to the capture and enslavement of at least 3.5 million people, making Eastern Europe the largest source of commercial slaves in the early modern world after West Africa. Despite the Black Sea slave trade's massive scale and distinctive features --- most notably the hostile relationship between slave raiders and native elites --- little is known about its impact on socioeconomic development. Analyzing the first comprehensive dataset on nomadic slave raids using difference-in-differences and instrumental variables strategies, we find that more intensely raided areas initially experienced slower urbanization and population growth but went on to not only catch up but achieve higher rates of development from the 18th century onward. We interpret these results as reflecting a gradual process of defensive state-building that accelerated capital investment and urban development. Our findings caution against generalizing conclusions about slavery's consequences from the transatlantic slave trade, suggesting that the nature of slave production and the relationship between raiders and native elites play a key role in conditioning such effects.