The merit of misfortune: Taiping Rebellion and the rise of indirect taxation in modern China, 1850s-1900s

Hanzhi Deng

Economic History Working Papers from London School of Economics and Political Science, Department of Economic History

Abstract: This article revisits the role of war in state development but goes beyond the scope of Western European nation states. It focuses on the relationship between political disorder and indirect taxation with micro-level evidence in late imperial China. With cross-sectional data for 266 prefectures this article employs quantitative methods to test the positive link between the warfare during the Taiping Rebellion (the greatest threat for the Qing reign) and the rapid rise and pervasive persistence of autonomous self-serving indirect taxation (lijin) institutions. The withering central fiscal role with the growing local fiscal-military needs accounted for this change. This article draws more economic and political implications by linking local fiscal autonomy to the Late Qing industrialization and the development of representative politics. The results demonstrate that the warfare by the Taiping Rebellion provided an unexpected opportunity for China’s fiscal modernization in a bottom-up way and that the impact was long-lasting

Keywords: political disorder; fiscal capacity; modern China; Taiping Rebellion; indirect taxation (search for similar items in EconPapers)
JEL-codes: H25 N45 O14 (search for similar items in EconPapers)
Pages: 69 pages
Date: 2021-01
New Economics Papers: this item is included in nep-cna and nep-his
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