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Building a Tax State in the 21st Century: Fiscal Pressure, Political Regimes, and Consumption Taxation

Research output: Contribution to journalArticlepeer-review

Original languageEnglish
Article number105879
Early online date14 Mar 2022
Accepted/In press3 Mar 2022
E-pub ahead of print14 Mar 2022
PublishedJun 2022

Bibliographical note

Funding Information: Previous versions of this article were presented at the SASE Annual Conference 2020, and at workshops of the Public Policy and Regulation Research Group as well as the Global South Research Group at King's College London. I thank all participants as well as Aline Gr?newald, the Editors of World Development, and three anonymous reviewers for their valuable comments and suggestions. Publisher Copyright: © 2022 Elsevier Ltd

King's Authors


How can states expand their fiscal capacity in the 21st century? I examine this question by looking at one of the most powerful contemporary fiscal tools at hand – the Value-Added Tax (VAT). Using a novel dataset on VAT rates worldwide since 2000, I argue that fiscal problem pressure can lead to an expanded usage of the VAT. However, this effect depends on the type of political regime. Whereas democracies tend to raise VAT in dire fiscal times, VAT rates in autocracies are more immune to fiscal pressure. Furthermore, I demonstrate that a worse cost-benefit ratio of VAT increases in autocracies can account for this variation. These findings call for a closer investigation of political regime dynamics and fiscal policy-making worldwide.

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