3 - A Theory of Elite Taxation and the Determinants of Security Taxes

Summary

Chapter 3 explains how the conventional crisis-oriented approach in the literature cannot explain variation in efforts to involve elites in the state-building enterprise. Instead, it argues that both demand and supply factors must be taken into account and disaggregates the components of each, including whether elites can satisfy their demand for public goods in the private market, the ideology of the government, and the extent to which linkages between business elites and the government exist. Chapter 3 also evaluates alternative explanations, including the availability of nonfiscal resources such as oil rents and foreign aid and the degree of inequality in society.