Methods Workshop with Branislav Slantchev
DateDecember 4, 2014
4357 Bunche Hall
Belinda SunnuPhone email@example.com
Presenter:Branislav Slantchev, UC San DiegoTitle: “Rich Subjects, Poor Kings: Rebellion Relief and the Ratchet Effect in Taxation”Abstract:Rulers face serious difficulties in their efforts to extract wealth from society through taxation. Historically, taxation was often not very high and attempts to increase it frequently caused revolts. Over time, however, taxation has increased dramatically while violent resistance has virtually disappeared. We present a model that shows how these patterns can be understood as arising from the Crown’s desire to maximize its income from taxation in a context where it is institutionally unconstrained but does not have very good information about the wealth of the subjects it is trying to tax. In this setting, high tax demands can push poor subjects into violent resistance, which might provide the Crown with evidence that it needs to lower the tax to acceptable levels (provide tax relief). This possibility, however, provides an incentive to the rich subject to join the revolt to take advantage of tax relief and avoid an increase of taxation that willingness to accept might entail in the future (ratchet effect). This interaction is resolved in the Crown settling for taxation that, depending on its information about the subjects’ wealth, can be low but peaceful, moderate but provoking occasional revolts by the poor, and high but risking that even the rich would join a revolt. As the Crown’s ability to better assess the wealth of its subjects grows, taxation will increase while violent resistance will decrease even in the absence of an increase in the Crown’s coercive capabilities or its public goods provision. The growth of the state can be understood as a direct consequence of administrative improvements rather than centralization of power, monopolization of violence, or provision of public goods.Paper: Click here to download.
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