De Facto Power, Democracy, and Taxation: Evidence from Military Occupation during Reconstruction

The extension of the franchise to former slaves in the post-Civil War American South provides a unique case to study the fiscal consequences of democratization. Black suffrage was not determined internally but was a consequence of military defeat and externally enforced by the U.S. Army during Reconstruction. We employ a triple-difference model to estimate the joint impact of enfranchisement and federal enforcement on taxation. We find that occupied counties where black voters comprised larger shares of the electorate levied higher taxes compared to similar non-occupied counties. These counties then experienced a comparatively greater decline in scal revenues in the decades following the end of Reconstruction. We also demonstrate that in these occupied counties, black politicians were more likely to be elected, and political murders by white supremacist groups were less likely. These fi ndings provide evidence on the key role of federal troops in limiting political capture by Southern elites.