Colonial Revenue Extraction and Modern Day Government Quality in the British Empire

• The relationship between the extent of government revenue a government collects, primarily in the form of taxation, and its overall quality has increasingly been identified as a key factor for successful state building, good institutions, and by extension general development. Initially deriving from historical research on Western Europe, this process is expected to unfold slowly over time. This study tests the claim that more extensive revenue collection has long-lasting and positive consequences for government quality in a developmental setting. Using fiscal records from British colonies, results from cross-colony/country regression analyses reveal that higher colonial income-adjusted revenue levels during the early twentieth century can be linked to higher government quality today. This relationship is substantial and robust to several specifications of both colonial revenue and modern day government quality, and remains significant under control for a range of rivaling explanations. The results support the notion that the current institutional success of former colonies can be traced back to the extent of historical revenue extraction.

Subject headings

HUMANIORA  -- Historia och arkeologi -- Historia (hsv//swe)

HUMANITIES  -- History and Archaeology -- History (hsv//eng)

SAMHÄLLSVETENSKAP  -- Statsvetenskap (hsv//swe)

SOCIAL SCIENCES  -- Political Science (hsv//eng)

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

taxation

government quality

institutions

British colonies

history

world income-distribution

sub-saharan africa

fiscal capacity

taxation

institutions

states

origins

authority

reversal

history

Business & Economics

Public Administration

Publication and Content Type

ref (subject category)

art (subject category)