Besley, Timothy and Persson, Torsten
Wars and state capacity.
Journal of the European Economic Association, 6
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The article builds a simple model to investigate how different types of armed conflict shape fiscal capacity: the state's ability to raise revenue from taxes. It starts from the simple observation that external war tends to generate common interests across groups in society, whereas internal, civil war entails deep conflicting interests across groups. Our model predicts that—compared to a society without conflict—civil wars lead to smaller investments in fiscal capacity, whereas prospects of external war generally lead to larger investments. Correlations in international data on conflicts and taxation are, by and large, consistent with these predictions.
||© 2008 The Author
||public finance, war, armed conflict, tax collection, tax revenue, public investment
|Library of Congress subject classification:
||H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
J Political Science > JA Political science (General)
J Political Science > JF Political institutions (General)
|Journal of Economic Literature Classification System:
||H - Public Economics > H1 - Structure and Scope of Government > H10 - General
N - Economic History > N4 - Government, War, Law, and Regulation > N40 - General, International, or Comparative
O - Economic Development, Technological Change, and Growth > O1 - Economic Development > O10 - General
||Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
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