Library Header Image
LSE Research Online LSE Library Services

Weak states and steady states: the dynamics of fiscal capacity

Besley, Timothy, Ilzetzki, Ethan and Persson, Torsten (2013) Weak states and steady states: the dynamics of fiscal capacity. American Economic Journal: Macroeconomics, 5 (4). pp. 205-235. ISSN 1945-7707

Full text not available from this repository.

Identification Number: 10.1257/mac.5.4.205


Investments in fiscal capacity—economic institutions for tax compliance—are an important feature of economic development. This paper develops a dynamic model to study the evolution of fiscal capacity over time. We contrast a social planner's investment path with politically feasible paths. Three types of states emerge in the long run: a common-interest state where public resources are devoted to public goods, a redistributive state where additional fiscal capacity is used for transfers, and a weak state with no transfers and a low level of public goods provision. We also present some preliminary evidence consistent with the theory.

Item Type: Article
Official URL:
Additional Information: © 2013 American Economic Association
Divisions: Economics
Subjects: H Social Sciences > HC Economic History and Conditions
H Social Sciences > HJ Public Finance
JEL classification: E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy Formation, Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook > E60 - General
Sets: Departments > Economics
Collections > Economists Online
Date Deposited: 22 Feb 2013 15:22
Last Modified: 20 Sep 2021 03:44

Actions (login required)

View Item View Item