This article explains why Ghana’s weak, building-focused property rating regime has persisted despite fiscal arguments for bringing land value more directly into local revenue systems. It argues that the problem lies not only in poor records, valuation constraints, weak enforcement, and low compliance but also in the relationship between the tax authority and the land authority. Metropolitan, Municipal, and District Assemblies have formal authority to raise property rates, yet the land relations needed to support land-based taxation, including information, valuation evidence, liability, legitimacy, and revenue expectations, remain partly shaped by customary authority. The article develops the concept of tax authority/land authority divergence to explain how land-based property tax reform can be constrained when the authority to tax and the authority to define, allocate, and legitimate land rights do not fully coincide. Drawing on documentary analysis, historical evidence, and 32 qualitative interviews, it shows how Ghana’s building-focused regime can remain fiscally weak but institutionally durable: it gives local governments a formal property tax instrument while leaving land value largely outside the recurrent local tax base.

Numerous studies show an association between military pressures and fiscal development, often based on cross-national correlations between wars and fiscal outcomes (e.g., tax ratios). However, investments in fiscal capacity may take time to yield higher tax revenues, obscuring the importance of factors that contributed to those investments. This article shifts attention from fiscal outcomes to the policymaking process. Using text-as-data techniques to analyse British parliamentary debates from 1803 to 1913, it offers new micro-level evidence of the relationship between military pressures and fiscal policymaking in the United Kingdom during the long 19th century. Our analyses show that military issues were associated with higher fiscal salience and lower contestation in tax debates. Qualitative analyses indicate that military issues were recurrently invoked to support the renewal of the personal income tax despite attempts to repeal it, confirming the close link between military and fiscal issues in shaping the modern British fiscal state.

What explains variation in tax outcomes between European states? Previous studies emphasise the role played by political institutions, but focus mostly on the input side of politics – how access to power and policy making is structured – and the institutions of relatively recent times. It is argued in this article that output‐side institutions related to the implementation of political decisions also matter and have deep institutional origins. As the classic literature has argued, the early modern period from 1450 to 1800 was formative for the development of fiscal capacity, but European states diverged in the stock of capacity they acquired. This article tests whether these differences still affect contemporary tax outcomes using a novel measure of fiscal capacity, based on the age, extent and quality of state‐administered cadastral records. The empirical analysis shows that, on average, countries with higher early modern fiscal capacity have higher tax revenue today, compared to countries with lower early modern fiscal capacity. This association is robust to different model specifications and alternative measurements. The findings have important policy implications as they indicate how deeply the current fiscal problems of the continent are entrenched, but also point to what needs to be prioritised within ongoing tax reforms.

This is an introduction to the special issue that presents new research on the state and its links to economic and social development. The special issue focuses on the processes of institutional transformation of the state, looking at how fiscal states arise in the developing world. The resulting set of articles presents a variety of approaches, ranging from case studies (at state and regional level), to comparative historical analysis and to macro-quantitative (country and cross-country level) perspectives. The overarching message is that historical, political and institutional factors are key to understanding the process of fiscal states formation and change around the developing world.

This article combines cross-national statistical analysis and in-depth historical case studies of Argentina and Chile to explore the relationship between two crucial dimensions of state capacity. We show that information capacity contributes to the development of fiscal capacity. When states have accurate information about their subject populations, territories, and economies, they are more effective at mobilizing revenues. In developing this argument this article makes three broader contributions. First, while existing scholarship either treats distinct dimensions of state capacity as separate entities, or simply assumes that they complement each other, our findings urge scholars to treat state development as sequential and to further investigate how multiple dimensions of state capacity are interrelated. Second, the paper suggests a broader underlying set of mechanisms – economies of scope – which connect these dimensions, and explores them in the specific context of how information capacity facilitates fiscal capacity. Third, we join the scholarship on the importance of societal compliance in the creation of the fiscal state, but with a focus on elite cooperation with the state's information collection efforts, which we show to be crucial to tax state development.

We argue that tax revenues and political institutions placing constraints on the executive power may reinforce each other over time and so co-evolve in the long run. This may also bring a shift in the composition of revenues, from taxes levied on a narrow base to broadly levied taxes. To test these hypotheses, we use historical cross-country data covering 31 countries for 1800–2012 and panel time series methods allowing for different forms of country-specific heterogeneity and cross-section dependence. The results offer three main findings. First, executive constraints, whether they are judicial or legislative, and tax revenues are cointegrated. While in the short run they can drift apart, this will be temporary because there is a long-run relationship between the two. Second, evidence of cointegration is strongest for revenues from direct taxes, suggesting that the existence and nature of a long-run relationship may be mainly related to the emergence of broad-based taxation. Third, long-run causality runs mostly from executive constraints to taxation. This is most evident for income taxes. Our findings link Sustainable Development Goals 16 and 17, implying that the goal of promoting inclusive and accountable institutions may work in synergy with that of generating internal resources to finance development goals.

What is the level of state capacity in developing countries today, and what have been its drivers over the past century? We construct a comprehensive new data set of tax and revenue collection for forty-six African polities from 1900 to 2015. Our data show that polities in Africa have been characterized by strong growth in fiscal capacity on average, but that substantial heterogeneity exists. The empirical analysis reveals that canonical state-building factors such as democratic institutions and interstate warfare have limited power to explain these divergent growth paths. On the other hand, accounting for the relationship between African polities and the international environment—through the availability of external finance and the legacy of colonialism—is key to understanding their differing investments in fiscal capacity. These insights add important nuances to established theories of state building. Not only can the availability of external finance deter investment in fiscal capacity, but it also moderates the efficacy of canonical state-building factors.

Fiscal capacity is regularly linked to warfare and democratization. However, the majority of income taxes – a cornerstone of government finance – were introduced by non-democratic states in peacetime. This paper is concerned with how autocratic politics shape the adoption and expansion of income taxes. Political institutions help overcome a commitment problem related to investments in taxation. To avoid being deposed by his or her elite supporters, a ruler needs to guarantee that new taxes will not be used opportunistically (e.g. expropriating the elite). If the elite supporters can effectively monitor the government, any transgressions will be detected and punishable. Institutions such as legislatures solve this commitment problem when they allow oversight and monitoring over the executive branch. The empirical implications are straightforward: in places with strong institutional oversight, which allows the elite to monitor the executive, we should observe higher fiscal capacity. I find support for this by analyzing newly available historical datasets over tax revenues, tax introduction dates, and political institutions.

The article examines the legal structure and constitutional consequences of ‘Next Generation EU’ (NGEU)—the innovative recovery fund that the European Union (EU) established to address the socio-economic consequences of the COVID-19 pandemic. The article sheds light on the complex normative constellation that was used to erect NGEU, and explains how this was satisfactorily done within the existing Treaty framework, by resorting to current legal bases. At the same time, however, the article underlines the profound constitutional consequences that NGEU has on the EU's architecture of economic governance. To this end, the article contrasts the strategy chosen to respond to the COVID-19 pandemic to that embraced to tackle the euro-crisis a decade ago, and concludes emphasising how NGEU significantly contributes to the federalisation of the EU, endowing its fiscal union with a fiscal capacity analogous to that of other federal regimes.

This article describes and explains a previously overlooked empirical pattern in state revenue collection. As late as 1913, central governments in the West collected similar levels of per capita revenue as the rest of the world, despite ruling richer societies and experiencing a long history of fiscal innovation. Western revenue levels permanently diverged only in the following half-century. We identify the twentieth-century great revenue divergence by constructing a new panel data set of central government revenue with broad spatial and temporal coverage. To explain the pattern, we argue that sustainably high levels of revenue extraction require societal demand for an activist state, and a supply of effective bureaucratic institutions. Neither factor in isolation is sufficient. We formalize this insight in a game-theoretic model. The government can choose among low-effort, legibility-intensive, and crony-favoring strategies for raising revenues. Empirically, our theory accounts for low revenue intake in periods of low demand (the nineteenth-century West) or low bureaucratic capacity (twentieth-century former colonies), and for eventual revenue spikes in the West.

Two dominant explanations for ethnic bias in distributional outcomes are electoral incentives and out-group prejudice. This article proposes a novel and complementary explanation for the phenomenon: variation in legibility across ethnic groups. The author argues that states will allocate fewer resources to groups from which they cannot gather accurate information or collect taxes. The argument is supported by original data on state aid from the 1891/1892 famine in the Russian Empire. Qualitative and quantitative analyses show that districts with a larger Muslim population experienced higher famine mortality and received less generous public assistance. The Muslims, historically ruled via religious intermediaries, were less legible to state officials and generated lower fiscal revenues. State officials could not count on the repayment of food loans or collect tax arrears from Muslim communes, so they were more likely to withhold aid. State relief did not vary with the presence of other minorities that were more legible and generated more revenue.