Relatively rich economies seemed to have solved an important puzzle: the peaceful coincidence of well-functioning markets and the rule of law with high rates of taxation. We argue that an explanation for this can be found in the historical traditions of institutional constraint. We explore the link between the experiences of medieval and early modern representative assembly experiences and current measures of state capacity using cross-country data. We find that more assembly experience is associated with higher tax revenues and a smaller shadow economy. It is also associated with greater government control over violence and reduced military expenditures and personnel per-capita.
|Journal||European Journal of Political Economy|
|State||Published - Mar 2020|