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

The origins of fiscal capacity have traditionally been linked to warfare and democratization. However, non-democratic states also invest in capacity, even times peace. In fact, the majority income taxes—a cornerstone government finance—were introduced by peacetime. This paper is concerned with how autocratic politics shape capacity. Political institutions help overcome a commitment problem related investments taxation. order not risk being deposed his or her elite supporters, ruler needs guarantee that new tools will be used opportunistically (e.g. for expropriation elite). If supporters can effectively monitor government, any transgressions detected punishable. Institutions such as legislatures solve problems when they allow oversight monitoring over executive branch. empirical implications are straightforward: places strong institutional oversight, which allows executive, we should observe higher I find support this notion analysing newly available historical datasets tax revenues, introduction dates, political institutions.