Hostname: page-component-cd9895bd7-mkpzs Total loading time: 0 Render date: 2024-12-26T20:38:23.227Z Has data issue: false hasContentIssue false
  • English
  • Français

The divergent paths of tax development during different waves of democratization

Published online by Cambridge University Press:  29 August 2018

Junko Kato  and
Miki Toyofuku
Junko Kato
Affiliation:
The University of Tokyo, Tokyo, Japan
Miki Toyofuku*
Affiliation:
Ochanomizu University, Tokyo, Japan
*
*Corresponding author. Email: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Taxation is a critical part of state power and has evolved with modernization. Although tax systems are expected to converge as countries achieve economic development, there are variations in the scale and structure of tax revenues. A recurring question is which tax dominates state financing in democracies. Some scholars associate mature democracies with progressive income taxation, and others find that democracies have relied on regressive taxation on consumption. Learning from the history of tax development, this paper illuminates that countries in different democratic waves followed divergent paths of tax development in the process of modernization. The first and second wave democratizers established progressive income taxation in the nineteenth and early twentieth centuries and continued to rely on it. On the other hand, newly democratized countries came to rely heavily on the value-added tax, which was innovated in the mid-twentieth century, shortly before the beginning of the third wave of democratization. By shedding new light on the linkage between the development of modern taxation and the waves of democratization, the study demonstrates that the trajectory of modernization has shaped different tax systems.

Type
Taxation and Welfare Since the Third Wave of Democratization
Information
Japanese Journal of Political Science , Volume 19 , Issue 3 , September 2018 , pp. 333 - 352
Copyright
Copyright © Cambridge University Press 2018 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aaron, H.J. (ed.) (1981) The Value-Added Tax: Lessons From Europe. Washington, DC: Brookings Institution.Google Scholar
Aizenman, J and Jinjarak, Y (2009) Globalisation and developing countries –a shrinking tax base? Journal of Development Studies 45, 653–671.Google Scholar
Baskaran, T (2014) Taxation and democratization. World Development 56, 287–301.Google Scholar
Beramendi, P and Rueda, D (2007) Social democracy constrained: indirect taxation in industrialized democracies. British Journal of Political Science 37, 619–641.Google Scholar
Bernardi, L, Fumagalli, L and Gandullia, L (2006) Overview of tax systems and main policy issues. In Bernardi, L, Fraschini, A, and Shome, P (eds), Tax Systems and Tax Reforms in South and East Asia. London: Routledge, pp. 3–34.Google Scholar
Besley, T and Persson, T (2009) The origins of state capacity: property rights, taxation, and politics. American Economic Review 99, 1218–1244.Google Scholar
Bird, RM and Gendron, P-P (2006) Is VAT the Best Way to Impose a General Consumption Tax in Developing Countries? Andrew Young School of Policy Studies, Georgia State University, International Studies Program Working Paper 6-17.Google Scholar
Bird, RM and Gendron, P-P (2007) The VAT in Developing and Transitional Countries. New York: Cambridge University Press.Google Scholar
Boskin, MJ (ed.) (1996) Frontiers of Tax Reform. Stanford: Hoover Institution Press.Google Scholar
Boskin, MJ and McLure, CE Jr (eds) (1990) World Tax Reform: Case Studies of Developed and Developing Countries. San Francisco: ICS Press.Google Scholar
Bradford, DF (1986) Untangling the Income Tax. Cambridge: Harvard University Press.Google Scholar
Bräutigam, D (2008) Introduction: taxation and state-building in developing countries. In Bräutigam, D, Fjeldstad, OH and Moore, M (eds), Taxation and State-Building in Developing Countries: Capacity and Consent. Cambridge: Cambridge University Press, pp. 1–33.Google Scholar
Bräutigam, D, Fjeldstad, OH and Moore, M (eds) (2008) Taxation and State-Building in Developing Countries: Capacity and Consent. Cambridge: Cambridge University Press.Google Scholar
Brownlee, WE (2004) Federal Taxation in America: A Short History. Cambridge: Cambridge University Press.Google Scholar
Cheibub, JA (1998) Political regimes and the extractive capacity of governments: taxation in democracies and dictatorships. World Politics 50, 349–376.Google Scholar
Cnossen, S (2015) Mobilizing VAT revenues in African countries. International Tax and Public Finance 22, 1077–1108.Google Scholar
Corbacho, A, Cibils, VF and Lora, E (eds) (2013) More Than Revenue: Taxation as a Development Tool. New York: Palgrave Macmillan.Google Scholar
Crivelli, E and Gupta, S (2016) Does conditionality in IMF-supported programs promote revenue reform? International Tax Public Finance 23, 550–579.Google Scholar
Curtis, JL (1989) Review ‘Of rule and revenue’ by Margaret Levi. American Political Science Review 83, 1424–1426.Google Scholar
Daunton, MJ (2001) Trusting Leviathan: The Politics of Taxation in Britain, 1799–1914. Cambridge: Cambridge University Press.Google Scholar
Díaz, FG (1990) Tax reform issues in Mexico. In Boskin, MJ and McLure, CE Jr (eds.), World Tax Reform: Case Studies of Developed and Developing Countries. San Francisco: ICS Press, pp. 251–271.Google Scholar
Ebrill, LP, Keen, M, Bodin, J-P and Summers, V (2001) The Modern VAT. Washington, DC: International Monetary Fund.Google Scholar
Eissa, NO and Jack, W (2010) Tax reform in Kenya: policy and administrative issues. In Gordon, RH (ed.) Taxation in Developing Countries: Six Case Studies and Policy Implications. New York: Columbia University Press, pp. 198–219.Google Scholar
Focanti, D, Hallerberg, M and Scartascini, C (2016) Tax reforms in Latin America in an Era of democracy. Latin American Research Review 51, 132–158.Google Scholar
Garcia, MM and von Haldenwang, C (2016) Do democracies tax more? Political regime type and taxation. Journal of International Development 28, 485–506.Google Scholar
Genschel, P and Seelkopf, L (2016) Did they learn to tax? Taxation trends outside the OECD. Review of International Political Economy 23, 316–344.Google Scholar
Gerschenkron, A (1952) Economic Backwardness in Historic Perspective, A Book of Essays. Cambridge: Belknap Press of Harvard University Press.Google Scholar
Gillis, M (1990) Tax reform and the value-added Tax: indonesia. In Boskin, MJ and McLure, CE Jr (eds) World Tax Reform: Case Studies of Developed and Developing Countries. San Francisco: ICS Press, pp. 227–250.Google Scholar
Gordon, RH (2010) Taxation in Developing Countries: Six Case Studies and Policy Implications. New York: Columbia University Press.Google Scholar
Hayashi, T (1965) Nihon ni okeru Sozei Kokka no Seiritsu. Tokyo: University of Tokyo Press (in Japanese).Google Scholar
Hays, JC (2003) Globalization and capital taxation in consensus and majoritarian democracies. World Politics 56, 79–113.Google Scholar
Huntington, SP (1991) The Third Wave: Democratization in the Late Twentieth Century. Norman: University of Oklahoma Press.Google Scholar
James, KA (2015) The Rise of the Value-Added Tax. Cambridge: Cambridge University Press.Google Scholar
Jun, J (2010) Korea's tax system: a growth-oriented choice. In Gordon, RH (ed.) Taxation in Developing Countries: Six Case Studies and Policy Implications. New York: Columbia University Press, pp. 220–254.Google Scholar
Kato, J (2003) Regressive Taxation and the Welfare State: Path Dependence and Policy Diffusion. Cambridge: Cambridge University Press.Google Scholar
Kato, J and Tanaka, S (2018) Does taxation lose Its role in contemporary democratisation? State revenue production revisited in the third wave of democratisation. European Journal of Political Research.Google Scholar
Keen, M and Lockwood, B (2010) The value added tax: its causes and consequences. Journal of Development Economics 92, 138–151.Google Scholar
Kennedy, W (1913) English Taxation, 1640–1799: An Essay on Policy and Opinion. London: G. Bell.Google Scholar
Levi, M (1988) Of Rule and Revenue. Berkeley: University of California Press.Google Scholar
Mahon, EJ (2004) Causes of tax reform in Latin America, 1977–95. Latin American Research Review 39, 3–30.Google Scholar
Mahon, JE Jr, Bergman, M and Arnson, C (eds.) (2015) Progressive Tax Reform and Equality in Latin America (Woodrow Wilson Center Reports on the Americas no. 35), Washington, DC: Woodrow Wilson International Center for Scholars.Google Scholar
Mankiw, NG (2016) Principles of Economics. Boston: Cengage Learning.Google Scholar
Martin, IW, Mehrotra, AK and Prasad, M (eds.) (2009) The New Fiscal Sociology: Taxation in Comparative and Historical Perspective. Cambridge: Cambridge University Press.Google Scholar
Martinez-Vazquez, J (2011) Taxation in Asia, Economics Faculty Publications, 24. Available at https://scholarworks.gsu.edu/econ_facpub/24.Google Scholar
Mitchell, BR (2007) International Historical Statistics: Europe 1750–2005, 6th Edn, Basingstoke: Palgrave Macmillan.Google Scholar
Oliveira, JT and Giuberti, AC (2010) Tax structure and tax burden in Brazil: 1980–2004. In Gordon, RH (ed.), Taxation in Developing Countries: Six Case Studies and Policy Implications. New York: Columbia University Press, pp. 255–294.Google Scholar
Peters, BG (1991) The Politics of Taxation: A Comparative Perspective. Cambridge: B. Blackwell.Google Scholar
Profeta, P and Scabrosetti, S (2010) The Political Economy of Taxation: Lessons From Developing Countries. Cheltenham: Edward Elgar Publishing.Google Scholar
Profeta, P, Puglisi, R and Scabrosetti, S (2013) Does democracy affect taxation and government spending? Evidence from developing countries. Journal of Comparative Economics 41, 684–718.Google Scholar
Rakner, L and Gloppen, S (2003) Tax reform and democratic accountability in Sub-Saharan Africa. In Van de Walle, N, Ball, N and Ramachandran, V (eds), Beyond Structural Adjustment: The Institutional Context of African Development. Houndmills: Palgrave Macmillan, pp. 77–100.Google Scholar
Rodrik, D (1997) Has Globalization Gone Too Far? Washington, DC: Institute for International Economics.Google Scholar
Rose, R and Karran, T (1987) Taxation by Political Inertia: Financing the Growth of Government in Britain. London: Allen & Unwin.Google Scholar
Sanchez, O (2006) Tax system reform in Latin America: domestic and international causes. Review of International Political Economy 13, 772–801.Google Scholar
Sandford, CT (2000) Why Tax Systems Differ: A Comparative Study of the Political Economy of Taxation. Bath: Fiscal publications.Google Scholar
Sato, S (1965) Kindai Zeisei no Seiritsu Katei. Tokyo: University of Tokyo Press (in Japanese).Google Scholar
Scheve, KF and Stasavage, D (2012) Democracy, War, and wealth: lessons from Two centuries of inheritance taxation. American Political Science Review 106, 81–102.Google Scholar
Scheve, KF and Stasavage, D (2016) Taxing the Rich: A History of Fiscal Fairness in the United States and Europe. Princeton: Princeton University Press.Google Scholar
Seligman, ERA (1911) The Income Tax: A Study of the History, Theory, and Practice of Income Taxation at Home and Abroad. New York: Macmillan.Google Scholar
Shehab, F (1953) Progressive Taxation: A Study in the Development of the Progressive Principle in the British Income Tax. Oxford: Clarendon Press.Google Scholar
Shoup, CS (1955) Taxation in France. National Tax Journal 8, 325–344.Google Scholar
Simons, HC (1938) Personal Income Taxation: The Definition of Income as a Problem of Fiscal Policy. Chicago: University of Chicago Press.Google Scholar
Steele, A, Paik, C and Tanaka, S (2017) Constraining the samurai: rebellion and taxation in early modern Japan. International Studies Quarterly sqx008.Google Scholar
Steinmo, S (1993) Taxation and Democracy: Swedish, British and American Approaches to Financing the Modern State. New Haven: Yale University Press.Google Scholar
Stiglitz, JE and Rosengard, JK (2015) Economics of the Public Sector, 4th Edn, New York: W.W. Norton.Google Scholar
Swank, D (2016) The new political economy of taxation in the developing world. Review of International Political Economy 23, 185–207.Google Scholar
Tait, AA (1988) Value-Added Tax: International Practice and Problems. Washington, DC: International Monetary Fund.Google Scholar
Tanzi, V and Zee, HH (2000) Tax policy for emerging markets: developing countries. National Tax Journal 53, 299–322.Google Scholar
The Royal Commission on Taxation (1966) Report of the Royal Commission on Taxation. Ottawa: Queen's Printer and Controller of Stationery.Google Scholar
The Shoup Mission (1949) Report on Japanese Taxation. Tokyo: General Headquarters, Supreme Commander for the Allied Powers.Google Scholar
Timmons, JF (2010) Taxation and representation in recent history. Journal of Politics 72, 191–208.Google Scholar
Webber, C and Wildavsky, AB (1986) A History of Taxation and Expenditure in the Western World. New York: Simon and Schuster.Google Scholar
Wibbels, E and Arce, M (2003) Globalization, taxation, and burden-shifting in Latin America. International Organization 57, 111–136.Google Scholar
Wilensky, HL (1975) The Welfare State and Equality: Structural and Ideological Roots of Public Expenditures. Berkeley: University of California Press.Google Scholar
Wilensky, HL (2002) Rich Democracies: Political Economy, Public Policy, and Performance. Berkeley: University of California Press.Google Scholar