Investing in fiscal capacity: legislative debates, military pressures, and tax policy in the United Kingdom (1803–1913)

Numerous studies show an association between military pressures and fiscal development, often based on cross-national correlations between wars and fiscal outcomes (e.g., tax ratios). However, investments in fiscal capacity may take time to yield higher tax revenues, obscuring the importance of factors that contributed to those investments. This article shifts attention from fiscal outcomes to the policymaking process. Using text-as-data techniques to analyse British parliamentary debates from 1803 to 1913, it offers new micro-level evidence of the relationship between military pressures and fiscal policymaking in the United Kingdom during the long 19th century. Our analyses show that military issues were associated with higher fiscal salience and lower contestation in tax debates. Qualitative analyses indicate that military issues were recurrently invoked to support the renewal of the personal income tax despite attempts to repeal it, confirming the close link between military and fiscal issues in shaping the modern British fiscal state.