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Deborah Bräutigam, Odd-Helge Fjeldstad, and Mick Moore's edited volume Taxation and State-Building in Developing Countries examines the relationship among the tax system, state capacity, and state-society relations in developing countries. Each of the chapters explores the ways in which the state's strategies for satisfying its revenue needs impact patterns of governance and promote effective state institutions. Bräutigam introduces the volume by reviewing and synthesizing the broad political-economy literature on taxation. Demonstrating a truly impressive command of a vast literature that spans several disciplines, decades, and regions, she identifies two main political-economy theories of taxation around which the individual chapters are organized. The first set of theories posits a relationship between the development of the tax system and the emergence of a particular regime type whereas, the second set focuses on a connection between taxation and state capacity.
To summarize, the first theoretical literature argues that the rise of representative government in European states has its roots in the sovereign's or state's revenue imperative. In brief, the sovereign entered into a contractual relationship with taxpayers in order to collect revenues more effectively and more reliably, setting the terms of "the fiscal contract." Ultimately, parliaments and representative governments emerged due to the sovereign's concessions to taxpaying elites. The second chapter, by Moore, analyzes a number of factors (like the presence of war, the mobility of taxable assets, the existence of natural resources, the size and complexity of the bureaucracy, and economic modernization) that contribute to or detract from the development of a consensual fiscal contract. The subsequent country studies examine a diverse subset of conditions and strategies that foster a more or less coercive approach to taxation in the developing and postcommunist world, including the reliance on centralized versus decentralized tax collection (in China, Tanzania, Uganda, and Peru), the strength of society (in Chile), the power of interest groups (in Poland), the role of critical junctures (in Poland and Russia), and the prevalence of natural resources (in Russia and Chile).
The second theoretical literature engaged by the case studies relates to state building in developing countries. According to prevailing theories, which again draw from the European experience, a state's efforts to collect tax revenue can generate modern bureaucratic capacity more broadly....