Fiscal capacity in non-democratic states: the origins and expansion of income tax

Per F. Andersson

No wp-2021-176, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: The origins of fiscal capacity have traditionally been linked to warfare and democratization. However, non-democratic states also invest in fiscal capacity, even in times of peace. In fact, the majority of income taxes—a cornerstone of government finance—were introduced by non-democratic states in peacetime. This paper is concerned with how autocratic politics shape fiscal capacity. Political institutions in non-democratic states help overcome a commitment problem related to investments in taxation.

Keywords: Fiscal capacity; Autocracy; Income tax (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-pbe and nep-pub
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