IDEAS home Printed from https://ideas.repec.org/p/unu/wpaper/wp-2021-176.html
   My bibliography  Save this paper

Fiscal capacity in non-democratic states: the origins and expansion of income tax

Author

Listed:
  • Per F. Andersson

Abstract

The origins of fiscal capacity have traditionally been linked to warfare and democratization. However, non-democratic states also invest in fiscal capacity, even in times of peace. In fact, the majority of income taxes—a cornerstone of government finance—were introduced by non-democratic states in peacetime. This paper is concerned with how autocratic politics shape fiscal capacity. Political institutions in non-democratic states help overcome a commitment problem related to investments in taxation.

Suggested Citation

  • Per F. Andersson, 2021. "Fiscal capacity in non-democratic states: the origins and expansion of income tax," WIDER Working Paper Series wp-2021-176, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-176
    as

    Download full text from publisher

    File URL: https://www.wider.unu.edu/sites/default/files/Publications/Working-paper/PDF/wp2021-176-fiscal-capacity-non-democratic-states-origins-expansion-income-tax.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Timothy Besley & Torsten Persson, 2009. "The Origins of State Capacity: Property Rights, Taxation, and Politics," American Economic Review, American Economic Association, vol. 99(4), pages 1218-1244, September.
    2. Daron Acemoglu & James A. Robinson, 2000. "Why Did the West Extend the Franchise? Democracy, Inequality, and Growth in Historical Perspective," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(4), pages 1167-1199.
    3. Powell, Robert, 2004. "The Inefficient Use of Power: Costly Conflict with Complete Information," American Political Science Review, Cambridge University Press, vol. 98(2), pages 231-241, May.
    4. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    5. Bengtsson, Erik & Olsson, Mats, 2018. "Peasant Aristocrats? Wealth and Social Status of Swedish Farmer Parliamentarians 1769–1895," Lund Papers in Economic History 175, Lund University, Department of Economic History.
    6. Lipset, Seymour Martin, 1959. "Some Social Requisites of Democracy: Economic Development and Political Legitimacy1," American Political Science Review, Cambridge University Press, vol. 53(1), pages 69-105, March.
    7. Weeks, Jessica L., 2012. "Strongmen and Straw Men: Authoritarian Regimes and the Initiation of International Conflict," American Political Science Review, Cambridge University Press, vol. 106(2), pages 326-347, May.
    8. Ansell,Ben W. & Samuels,David J., 2014. "Inequality and Democratization," Cambridge Books, Cambridge University Press, number 9781107000360.
    9. Gehlbach, Scott & Keefer, Philip, 2011. "Investment without democracy: Ruling-party institutionalization and credible commitment in autocracies," Journal of Comparative Economics, Elsevier, vol. 39(2), pages 123-139, June.
    10. Carter, David B. & Signorino, Curtis S., 2010. "Back to the Future: Modeling Time Dependence in Binary Data," Political Analysis, Cambridge University Press, vol. 18(3), pages 271-292, July.
    11. Cox,Gary W., 2016. "Marketing Sovereign Promises," Cambridge Books, Cambridge University Press, number 9781316506097.
    12. Scheve, Kenneth & Stasavage, David, 2010. "The Conscription of Wealth: Mass Warfare and the Demand for Progressive Taxation," International Organization, Cambridge University Press, vol. 64(4), pages 529-561, October.
    13. Cox,Gary W., 2016. "Marketing Sovereign Promises," Cambridge Books, Cambridge University Press, number 9781107140622.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Stephen L. Parente & Luis Felipe Sáenz & Anna Seim, 2022. "Income, education and democracy," Journal of Economic Growth, Springer, vol. 27(2), pages 193-233, June.
    2. Grier, Robin & Young, Andrew T. & Grier, Kevin, 2022. "The causal effects of rule of law & property rights on fiscal capacity," European Journal of Political Economy, Elsevier, vol. 74(C).
    3. De Magalhaes, Leandro & Giovannoni, Francesco, 2022. "War and the rise of parliaments," European Economic Review, Elsevier, vol. 148(C).
    4. Laura Seelkopf & Moritz Bubek & Edgars Eihmanis & Joseph Ganderson & Julian Limberg & Youssef Mnaili & Paula Zuluaga & Philipp Genschel, 2021. "The rise of modern taxation: A new comprehensive dataset of tax introductions worldwide," The Review of International Organizations, Springer, vol. 16(1), pages 239-263, January.
    5. Leonor Freire Costa & António Henriques & Nuno Palma, 2022. "Anatomy of a Premodern State," Economics Discussion Paper Series 2208, Economics, The University of Manchester.
    6. Stanley L. Winer, 2016. "The Political Economy of Taxation: Power, Structure, Redistribution," Carleton Economic Papers 16-15, Carleton University, Department of Economics.
    7. Calabuig, Vicente & Olcina, Gonzalo, 2023. "The elite, inequality and the emergence of progressive taxation," European Journal of Political Economy, Elsevier, vol. 79(C).
    8. Jacque Gao, 2022. "Investment with insecure property rights: Capital outflow openness under dictatorship," The Review of International Organizations, Springer, vol. 17(3), pages 569-595, July.
    9. Becker, Sascha O. & Ferrara, Andreas & Melander, Eric & Pascali, Luigi, 2018. "Wars, Local Political Institutions, and Fiscal Capacity: Evidence from Six Centuries of German History," CAGE Online Working Paper Series 395, Competitive Advantage in the Global Economy (CAGE).
    10. Alberto Alesina & Bryony Reich & Alessandro Riboni, 2017. "Nation-Building, Nationalism and Wars," NBER Working Papers 23435, National Bureau of Economic Research, Inc.
    11. Valentino Larcinese, 2011. "Enfranchisement and Representation: Italy 1909-1913," STICERD - Economic Organisation and Public Policy Discussion Papers Series 032, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    12. Roland Hodler, 2018. "The Political Economics Of The Arab Spring," Economic Inquiry, Western Economic Association International, vol. 56(2), pages 821-836, April.
    13. Valentino Larcinese, 2014. "Enfranchisement and Representation: Evidence from the Introduction of Quasi-Universal Suffrage in Italy," Working Papers 512, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    14. Sambit Bhattacharyya, 2011. "Growth Miracles and Growth Debacles," Books, Edward Elgar Publishing, number 13609.
    15. Jensen, Jeffrey L. & Yntiso, Sidak, 2019. "Democratic reversals and the size of government," European Journal of Political Economy, Elsevier, vol. 58(C), pages 21-49.
    16. Johnson, Noel D. & Koyama, Mark, 2017. "States and economic growth: Capacity and constraints," Explorations in Economic History, Elsevier, vol. 64(C), pages 1-20.
    17. Carlos Felipe Balcázar, 2016. "Long-run effects of democracy on income inequality in Latin America," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(3), pages 289-307, September.
    18. Alberto Alesina & Bryony Reich & Alessandro Riboni, 2020. "Nation-building, nationalism, and $$\hbox {wars}^*$$ wars ∗," Journal of Economic Growth, Springer, vol. 25(4), pages 381-430, December.
    19. Anne Meng, 2019. "Accessing the state: Executive constraints and credible commitment in dictatorship," Journal of Theoretical Politics, , vol. 31(4), pages 568-599, October.
    20. Ma, Debin & Rubin, Jared, 2019. "The Paradox of Power: Principal-agent problems and administrative capacity in Imperial China (and other absolutist regimes)," Journal of Comparative Economics, Elsevier, vol. 47(2), pages 277-294.

    More about this item

    Keywords

    Fiscal capacity; Autocracy; Income tax;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:unu:wpaper:wp-2021-176. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Siméon Rapin (email available below). General contact details of provider: https://edirc.repec.org/data/widerfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.