Taxation and representation in recent history

This paper disaggregates government accounts to examine whether and how representation affects the level and distribution of taxation. Using panel data for over 100 countries from 1970 to 1999 and cross-sectional data for approximately 75 democracies from 1990 to 1998, we find that both democratization and voter turnout induced a modest but highly systematic increase in revenue from regressive taxes on consumption. While one-third of the increase due to democratization reflects a shift from more inefficient and similarly regressive taxes on trade, most of it was new revenue. Less convincingly, democratization and voter turnout also increased total tax revenue. By contrast, neither democracy, nor voter turnout systematically increased revenue from progressive taxes on income and capital. With reasonable assumptions about tax incidence and participation patterns, these findings shed light on competing conceptions of taxation and representation.