Discussion Paper Details

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Title: State Capacity, Reciprocity, and the Social Contract

Author(s): Timothy J. Besley

Publication Date: August 2019


Programme Area(s): Development Economics and Public Economics

Abstract: This paper explores the role of civic culture in expanding fiscal capacity by developing a model based on reciprocal obligations; citizens pay their taxes and the state provides public goods. Civic culture evolves over time according to the relative payoff of civic-minded and materialist citizens. A strong civic culture manifests itself as high tax revenues sustained by high levels of voluntary tax compliance and provision of public goods. This captures the idea of government as a reciprocal social contract between the state and its citizens. The paper highlights the role of political institutions and common interests in the emergence civic culture.

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Bibliographic Reference

Besley, T. 2019. 'State Capacity, Reciprocity, and the Social Contract'. London, Centre for Economic Policy Research.