Taxation and democracy: an instrumental variable approach

Nurullah Gur ()

Applied Economics Letters, 2014, vol. 21, issue 11, 763-766

Abstract: Our article investigates the effect of taxation on democracy. We exploit exogenous variation in taxation driven by wars from the pre-modern era and document a positive and highly significant first-stage relationship between pre-modern war casualties and taxation. Using this instrumental variable strategy, we find that taxation has a positive effect on democracy.

Date: 2014
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DOI: 10.1080/13504851.2014.889793

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