EconPapers    
Economics at your fingertips  
 

Seigniorage and Political Instability

Alex Cukierman (), Sebastian Edwards () and Guido Tabellini ()

No 3199, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The importance of seignorage relative to other sources of government revenue differs markedly across countries. The main theoretical implication of this paper is that countries with more unstable and polarized political systems rely more heavily on seignorage. This result is obtained within the context of a political model of tax reform. The model implies that the more unstable and polarized the political system, the more inefficient is the equilibrium tax structure (in the sense that tax collection is more costly to administer), and the higher therefore, the reliance on seignorage. This prediction of the model is tested on cross-section data for 79 countries. It is found that, after controlling for other variables, political instability significantly contributes to explain the fraction of government revenue derived from seignorage. This finding is very robust. We also find that seignorage is positively related to political polarization, even though here the evidence is weaker because of difficulties in measuring polarization.

Date: 1989-12
Note: ME ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (22) Track citations by RSS feed

Published as Cukierman, Alex, Sebastian Edwards and Guido Tabellini. "Seigniorage And Political Instability," American Economic Review, 1992, v82(3), 537-555.

Downloads: (external link)
http://www.nber.org/papers/w3199.pdf (application/pdf)

Related works:
Journal Article: Seigniorage and Political Instability (1992) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:nbr:nberwo:3199

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w3199

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Series data maintained by ().

 
Page updated 2017-04-27
Handle: RePEc:nbr:nberwo:3199