State capacity, reciprocity and the social contract

Timothy Besley

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper explores the role of civic culture in expanding fiscal capacity by developing a model based on reciprocal obligations: citizens pay their taxes and the state provides public goods. Civic culture evolves over time according to the relative payoff of civic‐minded and materialist citizens. A strong civic culture manifests itself as high tax revenues sustained by high levels of voluntary tax compliance and provision of public goods. This captures the idea of government as a reciprocal social contract between the state and its citizens. The paper highlights the role of political institutions and common interests in the emergence of civic culture.

Keywords: reciprocity; fiscal capacity; cultural dynamics (search for similar items in EconPapers)
JEL-codes: J1 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2020-07-23
New Economics Papers: this item is included in nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (32)

Published in Econometrica, 23, July, 2020, 88(4), pp. 1307 - 1335. ISSN: 0012-9682

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http://eprints.lse.ac.uk/102939/ Open access version. (application/pdf)

Related works:
Journal Article: State Capacity, Reciprocity, and the Social Contract (2020)
Working Paper: State Capacity, Reciprocity, and the Social Contract (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:102939

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