Representation through Taxation: Revenue, Politics, and Development in Postcommunist States
Social scientists teach that politicians favor groups that are organized over those that are not.Representation through Taxation challenges this conventional wisdom. Emphasizing that there are limits to what organized interests can credibly promise in return for favorable treatment, I show that politicians may instead give preference to groups – organized or not – that by their nature happen to take actions that are politically valuable. I develop this argument in the context of the postcommunist experience, focusing on the incentive of politicians to promote sectors that are naturally more tax compliant, regardless of their organization. In the former Soviet Union, tax systems were structured around familiar revenue sources, magnifying this incentive and helping to prejudice policy against new private enterprise. In Eastern Europe, in contrast, tax systems were created to cast the revenue net more widely, encouraging politicians to provide the collective goods necessary for new firms to flourish.
Cambridge Studies in Comparative Politics, 2008. Honorable mention, AAASS Davis Center Book Prize in Political and Social Studies for outstanding monograph published on Russia, Eurasia, or Eastern Europe in anthropology, political science, sociology, or geography (citation). Based on Ph.D. dissertation, Mancur Olson Award for best dissertation in political economy (discussion, Political Economist newsletter).