Political Establishment
If we had to choose the two biggest factors in the ultimate outcome of the American Civil War, the economy and political establishment might be the most important. The Confederacy was not a government prior to secession. The government didn’t exist at all until February 1961, just two months before fighting officially started. That means they had no tax structure, no military structure, and no constitution.
They were very quick to catch up, despite the hardships they faced. The Confederacy ratified a constitution within a year (it was actually written and passed in March 1861, just a month after the founding of the government). They created and passed laws quickly, and they used their power to start officially bringing together militias to form their army.
That all being said, the North already had all of that. Moreover, their tax base was larger, allowing for more income, their banking system was more robust, and they had a much large cache of laws that allowed them to prosecute a war much quicker.
The downside is that the North did not take the Southern states seriously at first. Or, putting it more accurately, they assumed that any rebellion could be put down quickly, which would allow the country to come together once more. They were wrong. This caught the North flatfooted, and forced President Lincoln to significantly increase the Union army numbers (500,000 were called up in the first draw after several embarrassing losses).
In the end, however, the already established Union government held the advantage once it got its act together. There was less political rivalry, and rules of government that the South had to create from scratch (though they used established ideas for most of it). This allowed for more cohesive decisions once the war went into its second year. The Confederates would be well-led, though, so it did take away some of the advantages of the North.
Read Next: What if South Won the Civil War? – 4 Hypothetical Scenarios.