Democracy and taxation

Does democracy affect taxation? Do varieties of democratic institutions affect levels of revenue, methods of collection, and distributions of tax burdens? Many political scientists believe so despite the currently mixed evidence. Moreover, prominent models of fiscal politics yield differing predictions about whether and how elections, parties, constitutions, and legislative and executive decision rules influence policy choices. This essay reviews recent works on taxation under democracy with a focus on how scholars derive hypotheses about institutional effects. It evaluates the leading theories' main assumptions and implications, including the results of empirical tests so far. Many explanations focus mainly on electoral competition or on post-electoral governing, but not both, and draw their evidence from a small set of countries. Promising works develop more complete models of decision making, test hypotheses against a broader range of countries' experiences, and point toward more persuasive answers to current research questions.