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The fiscal impact of the War of the Pacific

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Author Info
Richard Sicotte () (University of Vermont, Burlington, VT, USA)
Catalina Vizcarra () (University of Vermont, Burlington, VT, USA)
Kirsten Wandschneider () (Occidental College, Los Angeles, CA, USA)

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Abstract

In the War of the Pacific (1879–1883), Chile defeated Peru and Bolivia, and acquired territories that contained vast deposits of sodium nitrate, a leading fertilizer. Chile’s export tax on nitrates later accounted for at least one half of all government revenue. We employ a multi-country model of export taxation in order to simulate the potential government revenues that Bolivia, Chile and Peru could have earned under the counterfactual scenario that Chile did not conquer the nitrate-rich provinces of its adversaries. Our results are that Peruvian and Bolivian government revenues could have been at least double their historical levels. We estimate that, over the remainder of the nineteenth century, Chile’s earnings from nitrates would have fallen by 80%.

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Publisher Info
Article provided by Association Française de Cliométrie (AFC) in its journal Cliometrica, Journal of Historical Economics and Econometric History.

Volume (Year): 3 (2009)
Issue (Month): 2 (June)
Pages: 97-121
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Handle: RePEc:afc:cliome:v:3:y:2009:i:2:p:97-121

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Related research
Keywords: Export tax; Nitrates; War of the Pacific; South America;

Find related papers by JEL classification:
C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
F14 - International Economics - - Trade - - - Country and Industry Studies of Trade
F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
N46 - Economic History - - Government, War, Law, and Regulation - - - Latin America; Caribbean
N76 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Latin America; Caribbean

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This page was last updated on 2009-11-24.

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