Protection Not for Sale, But for Tax Compliance

How do rulers raise taxes when the fiscal capacity of the state is weak? I argue that, in conditions of low fiscal capacity, rulers might secure high tax yields by granting protection from competition to key domestic producers. I offer qualitative evidence of this exchange in the developing world today and test the theory against a sample of thirty-two developing states in Latin American, Eastern Europe, and the former Soviet Union circa 2005. Results indicate that, conditional on poor fiscal capacity, declining industries pay higher taxes (or evade less) if governments grant them tariff protection from international competitors. The results add to recent scholarship that studies the conditions under which entry barriers—which are otherwise inefficient institutions—result in second-best solutions for states whose capabilities are still consolidating. My findings suggest that trade protection does not always stem from rent-seeking by government. This article therefore offers a new, alternative hypothesis to canonical models in international political economy.当国家财政能力孱弱时，统治者应如何提高税收？本文认为，在财政能力不足的情形下，统治者可通过向核心国内生产商提供竞争保护，以获取高额税收收入。针对当今发展中世界的这类税收与保护的交换关系，本文提供了定性证据，并以2005年前后拉丁美洲、东欧及前苏联地区的32个发展中国家为样本，对该理论展开检验。研究结果表明：在财政能力薄弱的前提下，若政府为衰退行业提供针对国际竞争者的关税保护，此类行业将缴纳更高税额（或更少逃税）。本研究结果补充了近期相关学术成果——后者聚焦于，在国家能力仍处于巩固完善阶段的背景下，原本属于低效制度的市场进入壁垒，如何能够为国家带来次优解决方案。本文的研究发现显示，贸易保护并非总是源于政府的寻租行为。因此，本文为国际政治经济学领域的经典模型提供了一种全新的替代性假说。