The impact of redistributive policies on voluntary contributions is still not well understood. While a higher level of redistributive taxation decreases the price of voluntary giving, it also changes the income distribution by decreasing income inequality. This paper provides a controlled laboratory experiment to investigate the net impact of the tax rate on public goods provision. The experimental findings show that while the participants decrease their voluntary contributions as the pre-tax income distribution becomes more equal, they increase their contributions with taxation. These findings have important implications for government policies regarding privately provided public goods.

This article deals with a fiscal reform implemented in Chile during the late 1870s, when the country was suffering a severe economic and fiscal crisis, on the eve of the War of the Pacific. In 1879, the Chilean government introduced a new set of direct levies, taxing inheritance, income and wealth, despite the historic resistance of most of the economic elites to direct taxation in a highly unequal society. The process also shows that not all the economic elite avoided direct taxation. Despite other challenges faced by any developing country in extracting taxes from its population (e.g. lack of both proper information and human capital), during c.1879-1884 collection of these new direct taxes was successful, mainly on account of the improved extractive capacity built up during the preceding decades. Yet, by the mid-1890s all direct taxes (new and old) had been either derogated or transferred to local government (in some cases after being modified). Once again, Chilean central government depended entirely on indirect taxes, with export duties on nitrate being the most important. Nitrate provides a good example of an export boom shaping taxation for the worse; rather than increasing and diversifying the sources of revenue, a dominant sector of the Chilean economic elite decided to stop paying direct taxes and to make the state entirely dependent on the cycles of the international economy. However, some members of the economic elite, although defeated in their purpose, were aware of the wide range of benefits of keeping direct taxation: social justice, financial health and less vulnerability to trade cycles. Unfortunately, the balance of power favoured elite groups with enough power to hinder direct taxation.

It is well known that a consumer price-neutral reform of consumption taxes and import tariffs is welfare-improving. This paper shows that such price controls are inferior to quantity controls in terms of welfare improvement. The paper next turns to a comparison of different abatement strategies. Whether or not policy changes should fix private abatement or public abatement relates to the level of earmarking, and depends on the relationship between private production and public abatement. There are cases in which increased public abatement only improves welfare by more than both increased private and public abatement together. The paper recommends that environmental earmarking in the form of public abatement should be delivered to cushion price hikes and sustain private energy consumption.

This paper contributes to research on the institutional determinants of tax capacity using annual data from 39 sub-Saharan African countries from 1985 to 2018 to construct a measure of tax capacity for each country based on the trend component of the ratio of actual to potential tax revenue. Potential revenue is estimated by a parsimonious tax performance specification, including only variables found to be robust determinants of the tax/GDP ratio. The results show that, on average, tax capacity is high (given potential) and has improved over time (especially for low-income countries). The final stage of analysis selects, from a wide variety of economic and institutional variables, the most important determinants of cross-country variation in tax capacity. Equal distribution of resources is the most important institutional factor associated with greater capacity, consistent with perceptions of equity supporting the fiscal bargain; corruption is associated with lower capacity, consistent with undermining trust in government. Private consumption and resource rents are associated with greater capacity. Other institutional factors are indirectly associated with greater capacity, such as accountability and elements of democracy associated with equity in the allocation and use of public resources.

This article combines cross-national statistical analysis and in-depth historical case studies of Argentina and Chile to explore the relationship between two crucial dimensions of state capacity. We show that information capacity contributes to the development of fiscal capacity. When states have accurate information about their subject populations, territories, and economies, they are more effective at mobilizing revenues. In developing this argument this article makes three broader contributions. First, while existing scholarship either treats distinct dimensions of state capacity as separate entities, or simply assumes that they complement each other, our findings urge scholars to treat state development as sequential and to further investigate how multiple dimensions of state capacity are interrelated. Second, the paper suggests a broader underlying set of mechanisms – economies of scope – which connect these dimensions, and explores them in the specific context of how information capacity facilitates fiscal capacity. Third, we join the scholarship on the importance of societal compliance in the creation of the fiscal state, but with a focus on elite cooperation with the state's information collection efforts, which we show to be crucial to tax state development.

Socio-natural disasters remain underexplored events in economic history, even though they stress societies in several ways and are known for their relationship with institutional change. In this paper, we explore this issue showing that major earthquakes in Chile have become a window of opportunity for important fiscal reforms. Our findings indicate that there are two mechanisms to explain this relationship: first, reconstruction demands greater state expenditure and intervention; and second, the emergence of narratives that justify these reforms, such as patriotism and solidarity. However, data show that in the case of Chile, changes following disasters have had little impact on the overall tax structure of the country, and the historical preference for indirect taxes has been maintained, with limited power to impose taxes on high-income groups.

This paper provides an overview of theoretical, empirical, and practical arguments in favor of or against a correction for the marginal excess burden of taxation (MEB). Benefit-cost analysis (BCA) should be used to compare the costs and benefits of a policy measure and its major alternatives, and whenever relevant, also to compare different ways of financing this. The best pragmatic approach is then to assume first that a policy measure is financed out of general tax revenues and then that the MEB of these taxes is broadly counterbalanced by the benefits of redistribution of these taxes. The latter assumption is consistent with the preferences for equality in a country’s current tax system. It is a simple and politically neutral assumption, and it implies that the marginal cost of public funds is equal to 1 and that no correction is needed in BCAs for the MEB. This shortcut assumption does not imply that the tax system is optimal or that BCAs should be distributionally weighted. Choosing an alternative source of financing, i.e., other than general tax revenues, should be regarded as a separate policy measure that should be analyzed separately in a BCA, including its distortionary and distributive effects.

I summarise new facts on hours worked differences across countries and their driving forces. The facts are derived from a comprehensive analysis of micro data sets. First, hours worked are substantially higher in poor than in rich countries. Second, lower hours worked in Europe than in the US can partly be explained by differences in vacation weeks and partly by differences in the demographic structure. Moreover, employment rates tend to be higher and weekly hours worked lower in Western Europe and Scandinavia than in the US, with the opposite being true in Eastern and Southern Europe. Last, among core-aged individuals, married women form the group that exhibits the largest differences in hours worked across countries. International differences in taxation, and especially in the tax treatment of married couples, are an important driver of these differences.

In housing affordability levels and volatility, there could hardly be a greater contrast than between the UK and Germany. Differences in history, institutions and policies are explored in this paper. Residential housing supply has been far more expansionary in Germany and mortgage credit more tightly regulated. A sensibly regulated rental market and stable German house prices have combined to leave the rental sector with over half of tenures. Policy failures in the UK have resulted in widening intergenerational inequality, increased social exclusion, adversely affected productivity and growth and raised the risk of financial instability. Policy lessons are drawn for the UK, which go far beyond the remit of the immediately responsible Ministry of Housing, Communities and Local Government.

Qing China represents a counterfactual to the early modern European history of fiscal expansion in the wake of warfare. In response to the staggering costs of suppressing the White Lotus Rebellion (1796–1804), the Jiaqing Emperor sought to solve the empire's fiscal problems by tightening bureaucratic control over an overstretched system of treasury finance. However, Jiaqing's policy of austerity and retrenchment was not simply an expedient in times of fiscal strain, but deeply rooted in ideological struggles over taxation that began in the eighteenth century. It was an expression of hardline fiscal conservatism, which held fixed revenue quotas sacrosanct and which I call quota-ism. This policy had dire consequences for the ability of the Qing regime to respond to external shocks and to fulfill its sovereign tasks – war, river conservancy and famine relief. It contributed to the bankruptcy of Qing government finance by the time of the Opium War.

I reconstitute the spending obligations and revenue sources of colonial New Jersey's provincial government for the years 1704 through 1775 from primary sources using forensic accounting techniques. I identify and analyze the methods for raising revenue to meet normal peacetime and emergency wartime expenses. I calculate the provincial tax burdens imposed on New Jersey's citizens. I identify how Britain interfered with New Jersey's fiscal structure. I estimate what the revenues and tax burdens would have been without this interference. New Jersey paid for war expenses by issuing bills of credit, spreading the tax burden of redeeming these bills into the future. New Jersey paid its yearly administrative costs with current property taxes and with current interest earnings from loaning paper money. In the absence of British interference and wars, New Jersey could have driven tax burdens to zero by using interest earnings to pay for all its provincial administrative costs.

With this study, we investigate the effects of changes in economic factors on body weight by constructing a utility theoretic model. The model is empirically estimated by combining data on individuals' body weight, demographic and physical activity information, and state-level measures pertaining to the prices of food away from home, food at home, and wages. By combining these data sources, we aim to estimate directly the weight effects of price and income changes. The empirical analysis suggests that decreasing the price of food at home could decrease body weight, a finding which has important public policy implications.

The “Aggie Bond” program was established in the 1980s to provide beginningand low-equity farmers access to capital. The bonds, which pay tax-exemptinterest, may be used by qualifying famers for purchases of farm real estateand equipment. Using Aggie Bond data collected from states and Census ofAgriculture data spanning 25 years, we examine whether the program has hadan impact on farm entrance, land ownership, and the size of operation. We donot find strong evidence that the program led to an increase in theproportion of beginning farmers; however, we find limited evidence theprogram helped beginning farmers become full land owners as well asincreased the rate of growth in the proportion of beginning farmers who arefull land owners.

El artículo analiza los cambios en la estructura tributaria de Yucatán, México, durante la transición del régimen colonial a la fiscalidad liberal, de 1850 a 1902. Caracteriza sus etapas en función de la composición y el protagonismo alternativo de los impuestos directos y los impuestos indirectos en las rentas públicas. Durante los profundos cambios en la estructura económica, la tributación indirecta al consumo y los impuestos directos sobre los sectores secundario y terciario protegieron el crecimiento del sector productivo del henequén (1869-1882). Finalmente, el impuesto sobre el henequén no sustituyó a los ingresos indirectos. La modernización fiscal (1896-1902) equilibró la tributación directa de producto con los aplicados a sectores más urbanos, el secundario y las ventas del sector mercantil.

This paper offers a long-term comparative study of Bolivian public finances using a new detailed database. First, it shows that Bolivian government revenues and expenditures were particularly small and volatile until the 1980s. Second, it stresses that, whereas the relative importance of social expenditure has grown constantly since the late 1930s, public revenues have always had an unbalanced structure. Finally, it confirms that budget deficits have been constant, at times reaching levels that were especially damaging for the overall economy. This suggests that the potential redistributive impact of Bolivian public finances was not necessarily (or not only) hindered by the lack of an explicit commitment towards redistributive expenses, but by an extreme vulnerability in the revenue side.

Economic issues will be key determinants of the outcome of the Scottish referendum on independence. Pensions are a key element of the economic case for or against independence. The costs of funding pensions in an independent Scotland would be influenced by mortality risks, the costs of borrowing and the segmentation of costs and risks (i.e. pricing to Scotland's experience rather than pooled across UK experience). We compare the overall costs of providing pensions in an independent Scotland against the resources that are available to cover these costs. Scotland has worse mortality experience than the UK as a whole, and Scottish government debt is likely to attract a liquidity premium relative to UK government debt. An independent Scottish government would have to create a bond market for public debt. The liquidity premium would make pensions cheaper to buy, but taxpayers or the consumers of public services would have to pay the cost.

Starting from the quantitative reconstruction of revenues and expenses of the Royal Treasury in the Yucatan province during the period 1801-1821, the paper shows the transition from an unbalanced regional fiscal structure that depended on colonial transfers (situados) to offset the deficit, to one self-sufficient structure in the context of the Independence War and the liberalism of the Cortes de Cadiz. An autonomy based on the indigenous capitation tax and the fiscal control of foreign trade that was made in the ports of the Yucatan Peninsula.