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

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  • Per F. Andersson

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.

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  • Per F. Andersson, 2021. "Fiscal capacity in non-democratic states: the origins and expansion of income tax," WIDER Working Paper Series wp-2021-176, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2021-176
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    Keywords

    Fiscal capacity; Autocracy; Income tax;
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