Public Economics and History: A Review of Fiscal Regimes and the Political Economy of Premodern States, Edited by Andrew Monson and Walter Scheidel

Abstract

Fiscal Regimes and the Political Economy of Premodern States greatly expands our knowledge of the history of premodern fiscal systems and raises important questions about the political economy of premodern states. Answering those questions can help explain how states developed the capacity to tax; why tax levels and government-spending patterns varied greatly in the past, even though per capita incomes were similar; how government debt and representative institutions arose; and, last but not least, why some premodern states expanded and others collapsed. But firm answers to those questions will have to combine the history outlined in Fiscal Regimes and the Political Economy of Premodern States with systematic data and formal models of political economy. (JEL E62, H20, H50, N40)

State Capacity and Economic Growth: Cautionary Tales From History

“…This is defined as the capacity of the state to enforce its rules across the territory it controls and is widely held to benefit the economy (Besley and Persson, 2009, 1218–20; Johnson and Koyama, 2017, 4–6; Koyama, 2022). Legal capacity is not well measured by fiscal capacity, since legal provision consumed only a tiny share of state expenditures, and was mainly financed by litigant fees (Hoffman et al, 2017, 1559). If anything, royal justice was a profitable enterprise and brought in net revenues for pre-modern states (Ormrod, 1999, 24–5).…”

Tax collection in the Roman Empire: a new institutional economics approach

“…Frank (1933) estimates that during the period from 200 to 157 BC warfare accounted for more than 70% of the state's revenues. As a matter of fact, the income provided by conquests was so large that taxation on Roman citizens was abolished in 167 BC, 5 the expenses of the state primarily being supported by the provinces until the third century AD; see Hoffman (2017).…”

Cliometric Approaches to War

“…Although the comparisons may overlook taxes that were spent locally and omitted from central government figures in China and the Ottoman Empire, that is unlikely to eliminate the gap in per capita tax levels. Differences in per-capita income or the frequency of warfare do not explain the gap, and it likely had something to do with the agency problems facing rulers of larger states such as China and the Ottoman Empire, because tax levels are low in other big premodern states, perhaps because of agency problems facing rulers in huge states and the reliance on representative institutions in western Europe (Hoffman 2017).…”

“…One serious problem with Bonney scheme is that is peculiar to Europe and does not generalize to the rest of the world, or even to Europe in the era of the Roman Empire (Hoffman 2017). Progress here will require economic models that capture the problems facing political leaders in premodern states, be they kings and emperors, or the leaders of ancient republics and democracies.…”