The fiscal impact of the War of the Pacific

Richard Sicotte (), Catalina Vizcarra () and Kirsten Wandschneider
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Richard Sicotte: University of Vermont, Burlington, VT, USA
Catalina Vizcarra: University of Vermont, Burlington, VT, USA

Cliometrica, Journal of Historical Economics and Econometric History, 2009, vol. 3, issue 2, 97-121

Abstract: In the War of the Pacific (1879–1883), Chile defeated Peru and Bolivia, and acquired territories that contained vast deposits of sodium nitrate, a leading fertilizer. Chile’s export tax on nitrates later accounted for at least one half of all government revenue. We employ a multi-country model of export taxation in order to simulate the potential government revenues that Bolivia, Chile and Peru could have earned under the counterfactual scenario that Chile did not conquer the nitrate-rich provinces of its adversaries. Our results are that Peruvian and Bolivian government revenues could have been at least double their historical levels. We estimate that, over the remainder of the nineteenth century, Chile’s earnings from nitrates would have fallen by 80%.

Keywords: Export tax; Nitrates; War of the Pacific; South America (search for similar items in EconPapers)
JEL-codes: C72 F13 F14 F17 H21 N46 N76 (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (2)

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