Working Paper: CEPR ID: DP13968
Authors: Timothy J. Besley
Abstract: This paper explores the role of civic culture in expanding fiscal capacity by developing a model based on reciprocal obligations; citizens pay their taxes and the state provides public goods. Civic culture evolves over time according to the relative payoff of civic-minded and materialist citizens. A strong civic culture manifests itself as high tax revenues sustained by high levels of voluntary tax compliance and provision of public goods. This captures the idea of government as a reciprocal social contract between the state and its citizens. The paper highlights the role of political institutions and common interests in the emergence civic culture.
Keywords: Civic Culture; Fiscal Capacity; Reciprocity; Social Contract
JEL Codes: N00; H00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| civic culture (Z18) | tax compliance (H26) |
| tax compliance (H26) | fiscal capacity (E62) |
| civic-mindedness (D64) | tax compliance (H26) |
| public goods (H41) | tax compliance (H26) |
| civic-mindedness (D64) | fiscal capacity (E62) |
| public goods (H41) | fiscal capacity (E62) |
| civic-mindedness (D64) | public goods (H41) |