No taxation, no democracy? Taxation, income inequality, and democracy

2012/05/03 by Dae Jin Yi · 1 citation
Social Sciences · Economics, Econometrics and Finance · #Corruption and Economic Development #Fiscal Policy and Economic Growth #Culture, Economy, and Development Studies

paper · doi:10.1080/17487870.2012.672252

openalex publication_date 2012/05/03 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29

Abstract

Does taxation promote democracy? Revisiting this question, I hypothesize that the effects of taxation on democracy tend to be relatively stronger in unequal societies because higher income inequality can amplify the extent to which citizens dissatisfied with higher levels of taxation want to soak elites. Using event history models to analyze a pooled time-series dataset of regime transitions that cover all countries from 1970 to 2000 if data are applicable, I find empirical evidence that taxation has a conditional impact on democratization, but not on democratic breakdown. According to the theory, higher taxation levels and greater income inequality should tend to promote democracy.

Citations

• Modernization: Theories and Facts
• Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England
• Some Social Requisites of Democracy: Economic Development and Political Legitimacy
• The Political Economy of the Resource Curse
• Does Oil Hinder Democracy?
• Endogenous Democratization

Cited by

• Income inequality in the United States [wikipedia]

Related

• Democracy, Redistribution and Inequality
• The Political Representation of Economic Interests
• Income inequality and the erosion of democracy in the twenty-first century
• The electoral consequences of taxation in OECD countries
• Endogenous Democratization