The Great Revenue Divergence

Lee, Alexander; Paine, Jack

doi:10.1017/s0020818322000200

Cited by 4 publications

(2 citation statements)

References 44 publications

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“…In the words of Bertone et al (2019), 'conflict reduces revenue mobilisation because of reduced economic activity and tax base'. Although more public revenue may be needed to serve as lubricating resources to provide security and curb the spate of conflicts, a recent study by Lee and Paine (2023) showed how the intensity of conflicts might make the collection very expensive and impossible in some cases.…”

Section: Notesmentioning

confidence: 99%

The fiscal effects of armed conflicts in Africa

Ezeoha,

Igwe,

Okoyeuzu

et al. 2023

African Development Review

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This study examines the impact of armed conflicts on the fiscal capacity of African governments. It made use of a data set covering 1997–2021 for 50 countries, as well as the system dynamic generalized method of moment estimation technique. The results show that, in the short run, conflicts undermine tax revenue, mount pressure on military expenditure, and force governments to rely more on mineral resource rents for their fiscal needs. As conflicts persist, this fiscal feature changes to a pattern that reflects a decline in mineral resource earnings and an increase in tax revenue. The impact on public health expenditure also changes from an increasing to a decreasing pattern, whereas the positive impact on military expenditure and external borrowing persists over time. The findings suggest that African countries in conflict can address their fiscal challenges by observing these patterns and putting in place policies that protect public resources (e.g., the adoption of digital financial technology protocols to facilitate remote revenue collection and strategic protection of mineral resource‐endowed zones from insurgents' control). Overall, enhancing government effectiveness and strengthening the institutions of governance is important to facilitate a quick return to normalcy in the event of conflict and to prevent future conflicts.

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Section: Notesmentioning

confidence: 99%

The fiscal effects of armed conflicts in Africa

Ezeoha,

Igwe,

Okoyeuzu

et al. 2023

African Development Review

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“…6.Despite promising recent work on individual country or period groupings (Cogneau, Dupraz, and Mesplé-Somps 2021; Frankema and Waijenburg 2014; Lee and Paine 2022; Mansour 2014; Prichard and Leonard 2010), we do not systematically know how much revenue African polities have historically collected.…”

mentioning

confidence: 97%

The Fiscal State in Africa: Evidence from a Century of Growth

Albers

Suesse

2022

Int Org

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What is the level of state capacity in developing countries today, and what have been its drivers over the past century? We construct a comprehensive new data set of tax and revenue collection for forty-six African polities from 1900 to 2015. Our data show that polities in Africa have been characterized by strong growth in fiscal capacity on average, but that substantial heterogeneity exists. The empirical analysis reveals that canonical state-building factors such as democratic institutions and interstate warfare have limited power to explain these divergent growth paths. On the other hand, accounting for the relationship between African polities and the international environment—through the availability of external finance and the legacy of colonialism—is key to understanding their differing investments in fiscal capacity. These insights add important nuances to established theories of state building. Not only can the availability of external finance deter investment in fiscal capacity, but it also moderates the efficacy of canonical state-building factors.

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A Theory of External Wars and European Parliaments

Kenkel

Paine

2023

Int Org

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The development of parliamentary constraints on the executive was critical in Western European political history. Previous scholarship identifies external wars as a key factor, but with varying effects. Sometimes, willing monarchs granted parliamentary rights in return for revenues to fight wars. Yet at other times, war threats empowered rulers over other elites or caused states to fragment. We analyze a formal model to understand how external wars can either stimulate or undermine prospects for a contractual relationship between a ruler and elite actors. We recover the standard intuition that war threats make the ruler more willing to grant parliamentary rights in return for revenue. Our key insight is that war threats also affect the bargaining position of elites. A previously unrecognized tension yields our new findings: stronger outsider threats increase pressure either on elites to fund the ruler or on the ruler to accept constraints—but not both simultaneously. Elites with immobile wealth depend on the ruler for security. War threats undercut their credibility to refuse funding for an unconstrained ruler. By contrast, war threats make elites with mobile wealth and a viable exit option unwilling to fund a hopeless war effort. Only under circumscribed conditions do war threats align three conditions needed for parliament to arise in equilibrium: ruler willingness, elite credibility, and elite willingness. We apply our theory to posit strategic foundations for waves and reversals of historical European parliaments.

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The Great Revenue Divergence

Cited by 4 publications

References 44 publications

The fiscal effects of armed conflicts in Africa

The fiscal effects of armed conflicts in Africa

The Fiscal State in Africa: Evidence from a Century of Growth

A Theory of External Wars and European Parliaments

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