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

  • Toke Aidt

    ()

  • Peter Jensen

    ()

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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File URL: http://hdl.handle.net/10.1007/s10797-008-9069-9
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 16 (2009)
Issue (Month): 3 (June)
Pages: 362-394

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Handle: RePEc:kap:itaxpf:v:16:y:2009:i:3:p:362-394
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

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  11. Aidt, T.S. & Eterovic, D.S., 2007. "Give and Take: Political Competition, Participation and Public Finance in 20th Century Latin America," Cambridge Working Papers in Economics 0714, Faculty of Economics, University of Cambridge.
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