Inequality and redistribution are classic themes in political science and beyond. But although work on government spending abounds, the study of taxation and, in particular, the politics of taxation has lagged behind. We seem now to be experiencing a renewed interest in the politics of taxation, perhaps inspired by Thomas Picketty’s work in economics (i.e., Capital in the Twenty-First Century, 2013) and exemplified within our discipline by Kenneth Scheve and David Stasavage’s Taxing the Rich: A History of Fiscal Fairness in the United States and Europe (2016). The Political Economy of Taxation in Latin America, in this context, is a very timely and informative contribution that will make a lasting mark on the study of the politics of taxation in Latin America and inspire follow-up work on the subject.

The editor’s introduction and conclusion that bracket the eight contributed chapters are framed around three questions: “What explains the region’s low levels of taxation? What accounts for the region’s tax structure? What explains differences across countries” (p. 3). These are pertinent questions, and all contributors present a great amount of information that educates the reader about both technical and political aspects of taxation. The sheer amount and accessibility of the information make the book worth reading, and recurring arguments connect the different contributions.

To get my sole critique out of the way before delving into the volume’s many strengths, there is something amiss in the framing of those first two questions. The volume exhaustively drives home the notion that low levels of taxation and lack of progressiveness are important characteristics of Latin American tax systems. However, the questions are presented in a way that begs for cross-regional comparisons—of which there are hardly any—but does not leverage intra-regional comparison, of which there is plenty. This framing, in turn, forces a significant portion of the introduction and conclusion to be spent in a search for commonalities across chapters that have very different approaches, scopes, and interests.

Although the chapters are held together by several shared themes, a common set of possible explanations for low taxation and lack of progressive taxes is not one of them. In fact, in trying to collect the lessons from the chapters, the introduction comes up with a daunting list. Commodity cycles and resource nationalism, the strength of economic elites, state capacity to ensure compliance, patterns of economic incorporation, commitment to public spending, and electoral rules are mentioned at the outset, but the book also proposes to assess the role of “public opinion, democratic institutions, natural resources, interest groups, ideology, and state capacity in hindering or facilitating fiscal extraction” (p. 15). And this is not an exhaustive list.

It is unfair to expect that a cogent story would emerge from such a varied set of contributions—and I would argue that it is also unnecessary. There are plenty of interesting ideas in all chapters. In fact, by simply stating that Latin America taxes little, relies too much on indirect taxes, and that the tax intake is brutally influenced by commodity cycles, the introduction makes it clear that Latin America needs to talk about taxes.

The first two contributed chapters are dedicated to the taxation of commodities. Francisco Monaldi’s “Political Economy of Oil Taxation” (chapter 2) shows that the oil industry—a “high sunk cost sector’”—is an almost irresistible target for taxation or expropriation by short-term–minded politicians. This, in turn, leads to cycles of “resource nationalism” with deleterious consequences for policy design and fiscal performance. Marcelo Bergman (chapter 3) shows that even though revenue increased during the commodity supercycle, compliance did not. Commodities, he points out, are an easy source of revenues and preclude the development of state capacity to broaden the tax base. The level of detail in both chapters is impressive, and they will inspire researchers to consider the extent to which similar processes affect (or not) non-oil commodities. Perhaps their main contribution is to highlight different sources of pro-cyclical tax revenues that can be traced back to commodity dependence. Commodity dependence shapes fiscal choices, and commodity cycles generate fiscal cycles. Here I am tempted to push the argument one step further and suggest that perhaps these “structural” fiscal cycles contribute to the “macroeconomics of populism,” to borrow from the title of Rudiger Dornbusch and Sebastian Edwards’s classic edited volume. Both chapters, moreover, support the idea that governments in general, and left-leaning governments in particular, have more leverage when commodity prices and, as Bergman notes, international interest rates, are favorable (as in Daniela Campello’s The Politics of Market Discipline, 2015).

Four chapters focus on the relative power of different social groups in shaping taxes, and all point out the limits of using “median voter approaches” to understand Latin America’s tax levels and structure. Gabriel Ondetti’s chapter (chapter 4) employs historical analysis to examine the extent to which shifts in power and ideology can alter the tax structure. After ruling out institutional explanations, his basic argument is that the credible threat of a revolutionary Left leads to a (successful) reaction that undermines labor organization, left-wing parties, and civil society organizations and generates staunch and unified opposition to taxation by economic elites. Low taxation follows. For Tasha Fairfield (chapter 7), the disproportional power yielded by Latin American elites makes them a stronger driver of the structure of taxation than what is expected by median-voter approaches. This is due not only to elites’ structural power to determine investment, but also their greater resources to lobby politicians and, eventually, to resist taxation. In this superb chapter, Fairfield examines the policy-making process—and not just its outcomes—in three countries and notes that “voters rarely play a leading role in the politics of progressive direct taxation” (p. 174). This on-the-ground type of analysis is reminiscent of Steven Haggard and Roubert Kaufman’s work (Dictators and Democrats, 2016). Even though it has distributive implications, taxation, much like democratization, is often an elite (or inter-elite) process.

Aaron Schneider’s chapter 5 focuses on the “rising and falling elite and popular sectors” (p. 139) and the fiscal federal bargains necessary to sustain them. The coinciding of moments of elite replacement, as well as changes in enfranchisement and in a country’s modes of insertion into the world economy, creates windows of opportunities for tax reforms and helps us understand why Brazil is such an outlier in terms of tax intake in the region. James Mahon’s chapter (chapter 8) also takes an historical approach. In a different manner from other contributions, Mahon opens with an interesting cross-regional comparison that concludes that Latin America is better at democracy than at liberalism (p. 201). He then offers the intriguing argument that weak liberalism is a historical consequence of not having attempted to tax (landed) property and of therefore having failed to develop the capacity to do so. Although interesting in its own right, this argument also echoes the one made by earlier chapters on commodity dependence: the availability of sources of taxes that are technically and politically easy to collect leads to low-capacity states and to very dire long-term consequences.

The remaining two chapters complement the volume by examining institutional determinants of the tax structure and public opinion. Mark Hallerberg and Carlos Scartascini (chapter 6) show that reforms that introduce tax incentives are much more common than those that eliminate them, and those that reduce neutrality are more common than those that increase it (p. 149). These nuggets alone illustrate the difficulties of reshaping tax systems in the direction of a normatively superior alternative. The gist of their argument is that “more encompassing institutions lead to better policy” (p. 145). While very compelling theoretically, the authors find only moderate support for the idea that personalistic electoral systems lead to the erosion of tax neutrality. Two other results are noteworthy, however. They find that the ideology of presidents has no discernible effect on tax reform and that financial crises are associated with reforms that broaden the tax base. Changes in tax policy, it seems, might be driven by governments’ responses to changes in structural conditions that they do not fully control, instead of being the fulfillment of a thought-out policy agenda.

Juan A. Bogliaccini and Juan Pablo Luna (chapter 9) make smart use of survey data to examine how preferences for progressive taxation and perceptions of state capacity vary across the region. Given the complexity of any issue pertaining to taxation, the lack of clear results here is not surprising. What stands out is that support for progressive taxation is relatively high in the region, but with the exceptions of Mexico and Guatemala, these preferences are only marginally related to other characteristics of individuals.

No reader of the volume will come away empty-handed. All the chapters make it clear that Latin America taxes little, badly, and unfairly. Even if it does not settle the question of why this is the case, the volume offers several interesting leads, such as the fact that Latin American economies are very reliant on commodities, and its societies have been extremely unequal and asymmetrical since colonial times.