Taxation and democratization

Arbeitspapier

Anecdotal evidence from pre-modern Europe and North America suggests that rulers are forced to become more democratic once they impose a significant fiscal burden on their citizens. One difficulty in testing this taxation causes democratization hypothesis empirically is the endogeneity of public revenues. I use introductions of value added taxes and autonomous revenue authorities as sources of quasi-exogenous variation to identify the causal effect of the fiscal burden borne by citizens on democracy. The instrumental variables regressions with a panel of 122 countries over the period 1981-2008 suggest that revenues had on average a mild positive effect on democracy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: cege Discussion Papers ; No. 164

Classification and Topics

• Classification: Wirtschaft ; Taxation, Subsidies, and Revenue: General ; Capitalist Systems: Property Rights ; Fiscal and Monetary Policy in Development
• Subject: taxation ; democracy ; democratic transition ; tax innovations

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Baskaran, Thushyanthan
• Event: Veröffentlichung
• (who): University of Göttingen, Center for European, Governance and Economic Development Research (cege)
• (where): Göttingen
• (when): 2013

Further information

• Handle: http://hdl.handle.net/10419/76805
• Last update: 10.03.2025, 11:45 AM CET