Taxes, National Identity, and Nation Building: Evidence from France

63 Pages Posted: 13 Apr 2015 Last revised: 15 May 2015

See all articles by Noel D. Johnson

Noel D. Johnson

George Mason University - Department of Economics; George Mason University - Mercatus Center

Date Written: April 25, 2015

Abstract

What is the relationship between state capacity, national identity, and economic development? This paper argues that increases in state capacity can lower the collective action costs associated with political and economic exchange by encouraging the formation of a common identity. This hypothesis is tested by exploiting the fact that the French Monarchy was more successful in substituting its fiscal and legal institutions for those of the medieval seigneurial regime within an area of the country known as the Cinq Grosses Fermes (CGF). Highly disaggregated data on regional self-identification from the 1789 Cahiers de DoleĢances confirm that regions just inside the CGF were more likely than regions just outside the CGF to identify themselves with national, as opposed to local, institutions. We also show that regions inside the CGF that affiliated with national identity were more economically developed during the first half of the nineteenth century and more likely to contribute towards local public goods.

Keywords: Culture, Institutions, State Capacity, Economic Development

JEL Classification: D03, N43, O43

Suggested Citation

Johnson, Noel D., Taxes, National Identity, and Nation Building: Evidence from France (April 25, 2015). GMU Working Paper in Economics No. 15-33, Available at SSRN: https://ssrn.com/abstract=2593331 or http://dx.doi.org/10.2139/ssrn.2593331

Noel D. Johnson (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
Fairfax, VA 22030
United States

George Mason University - Mercatus Center

3434 Washington Blvd., 4th Floor
Arlington, VA 22201
United States

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