Threat of taxation, stagnation and social unrest: Evidence from 19th century sicily

Gema Lax-Martinez, Dominic Rohner and Alessandro Saia

Journal of Economic Behavior & Organization, 2022, vol. 202, issue C, 361-371

Abstract: Taxation may trigger social unrest, as highlighted by historical examples. At the same time, tax income could boost state capacity which may, in turn, foster political stability. Understanding the a priori ambiguous taxation-turmoil nexus is particularly relevant for low-income countries today – yet causal evidence on the topic is very scarce. Using a regression discontinuity design, we exploit a unique policy experiment in 19th century Sicily to identify the effect of taxation on social unrest. It turns out that it is mostly the threat of taxation that may distort economic investment and ultimately result in greater political turmoil.

JEL-codes: D74 H20 H26 J10 N43 O10 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Working Paper: Threat of Taxation, Stagnation and Social Unrest: Evidence from 19th Century Sicily (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:202:y:2022:i:c:p:361-371

DOI: 10.1016/j.jebo.2022.08.007

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