Strategic Taxation

This book explains how and when developing countries will increase taxation to fund state development. Taxation fundamentally changes the relationship between governments and citizens, leading citizens to increase the demands they place on government. While this can lead governments to decrease corruption and increase public goods, it can also lead governments to strategically underinvest in state capacity and to lower taxation in order to reduce citizens' demands. The book shows that low-capacity democracies are particularly prone to low taxation.