© The Author(s) 2018. While human trafficking occupies a prominent place on the global policy agenda, many aspects of this phenomenon remain empirically underdeveloped. We examine the role of state capacity in these illicit supply chains, positing that trafficking flows may persist because even well-intentioned states might lack the requisite capacity to take effective action. Along those lines, we assess the impact of two facets of state capacity, bureaucratic efficacy and fiscal capacity, upon the probability of a country being a source or destination for the two types of human trafficking, forced labor and prostitution. We find that state capacity, particularly fiscal capacity, is significantly related to reduced labor and sex trafficking at both the source and destination levels.