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Dissecting the sinews of power: international trade and the rise of Britain’s fiscal-military state, 1689-1823

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  • Dal Bó, Ernesto
  • Hutkova, Karolina
  • Leucht, Lukas
  • Yuchtman, Noam

Abstract

We evaluate the role of taxes on overseas trade in the development of imperial Britain’s fiscal-military state. Influential work, for example, Brewer’s Sinews of Power, attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in revenue from traded goods, accounting for over half of indirect taxation around 1800. This challenges conventional wisdom, attributing the development of the British state to domestic factors. International factors mattered, too.

Suggested Citation

  • Dal Bó, Ernesto & Hutkova, Karolina & Leucht, Lukas & Yuchtman, Noam, 2025. "Dissecting the sinews of power: international trade and the rise of Britain’s fiscal-military state, 1689-1823," LSE Research Online Documents on Economics 123526, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:123526
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    More about this item

    Keywords

    fiscal capacity; international trade; British empire; taxation;
    All these keywords.

    JEL classification:

    • N43 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Europe: Pre-1913
    • N73 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services - - - Europe: Pre-1913
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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