Working Paper: NBER ID: w30754
Authors: Ernesto Dal B; Karolina Hutkov; Lukas Leucht; Noam Yuchtman
Abstract: We evaluate the role of taxes on trade in the development of imperial Britain’s fiscal-military state. Influential work, e.g., Brewer’s (1989) "Sinews of Power," attributed increased fiscal capacity to the taxation of domestic, rather than traded, goods: excise revenues, coarsely associated with domestic goods, grew faster than customs revenues. We construct new historical revenue series disaggregating excise revenues from traded and domestic goods. We find substantial growth in taxes on traded goods, accounting for over half of indirect taxation around 1800. This challenges the conventional wisdom attributing the development of the British state to domestic factors: international factors mattered, too.
Keywords: Fiscal-Military State; International Trade; Taxation; Historical Economics
JEL Codes: H2; N43; P1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| international trade (F19) | fiscal capacity (E62) |
| taxes on traded goods (F19) | fiscal capacity (E62) |
| taxes on traded goods (F19) | tax revenues (H29) |
| increased taxation on traded goods (H29) | expansion of Britain's fiscal-military state (H56) |
| international trade (F19) | growth of fiscal capacity (H19) |