Taxation in Autocracies: When Is Super-Encompassing Interest Preserved?

50 Pages Posted: 7 May 2012 Last revised: 4 Dec 2016

See all articles by Yijiang Wang

Yijiang Wang

Cheung Kong Graduate School of Business

Date Written: November 30, 2016

Abstract

A theory is introduced to systematically explain autocracies’ diverse experiences with taxation. State power relative to citizens’ capacity for violence determines the limit of taxation, the highest tax rate that citizens will tolerate and pay. Rulers can spend resources on coercion to increase state power. The coercion and taxation levels that they choose to maximize net revenue vary with social and economic conditions leading to various state types: strong, weak, collapsing and benevolent featuring respectively tax tyranny, tax incompetency, tax-induced violence and tax harmony. The theory informs important policy issues.

Keywords: Autocracy, state power, taxation, violence

JEL Classification: D02, D74, D78, H30, N40, O12, P00, P16, P48

Suggested Citation

Wang, Yijiang, Taxation in Autocracies: When Is Super-Encompassing Interest Preserved? (November 30, 2016). Available at SSRN: https://ssrn.com/abstract=2052597 or http://dx.doi.org/10.2139/ssrn.2052597

Yijiang Wang (Contact Author)

Cheung Kong Graduate School of Business ( email )

Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China

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