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Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860–1938

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  • Toke Aidt
  • Peter Jensen

Abstract

We study the consequences of the extension of the voting franchise for the size of (central) government and for the tax structure in 10 Western European countries, 1860-1938. We show, .rstly, that the gradual relaxation of income and wealth restrictions on the right to vote contributed to growth in government spending and taxation. Secondly, we show that the impact of the franchise extension on the tax structure is conditional on tax collection costs. We find that the share of direct taxes (including the personal income tax) is positively affected by the franchise extension, but only if relative collection costs are below a given threshold. We use literacy as a proxy for the cost of levying a broad-based income tax.
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  • Toke Aidt & Peter Jensen, 2009. "Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860–1938," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 16(3), pages 362-394, June.
  • Handle: RePEc:kap:itaxpf:v:16:y:2009:i:3:p:362-394
    DOI: 10.1007/s10797-008-9069-9
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    More about this item

    Keywords

    Voting franchise; Democracy; Public finance; Taxation; D7; H1;
    All these keywords.

    JEL classification:

    • D7 - Microeconomics - - Analysis of Collective Decision-Making
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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