Victor Menaldo

Fields

Comparative Politics (Latin America)
International Relations
Methods

Research and Teaching Interests

Political Economy
Economic History
Latin American Politics
Fiscal and budgetary institutions

Dissertation: Inequality and Redistribution Across Two Centuries: The Path-Dependent Politics of Taxation

Are democracies more redistributive than autocracies? If so, does this difference hold true only for highly unequal democracies: regimes in which, putatively, the poor majority has both the desire and political wherewithal to redistribute wealth from the rich?

To find out if unequal democracies are more redistributive than autocracies, I construct long-run, longitudinal datasets dating back to the 19th Century on the fiscal history of Latin America. I document a puzzle: when these highly unequal societies have been democratic, they have not been more redistributive than when they have been autocratic. I explain this surprising finding, which seriously contradicts the Tocquevillian foundation of extant theories of democratization (Boix 2003; Acemoglou & Robinson 2006), and the political economy of democracy (Meltzer-Richard 1981), with a supply-side theory of redistribution. Path-dependent, self-reinforcing tax systems centered on regressive excise taxes, seignorage and non-tax revenue preclude even the most representative of governments in inveterately unequal societies from implementing progressive, direct taxes on income and profits.

I then test and corroborate several empirical implications generated by this theory. Foremost among them is the prediction that it is only in urbanized economies, in which the supply-side constraints against progressive income taxes are attenuated, that the ruling elite will be wont to leave behind anti-redistributional measures in their country’s constitutions before ushering in democratization (e.g., Chile’s Pinochet), therefore erecting impediments to redistribution before dictatorial extrication. This presents a second puzzle, however: what has determined greater redistribution over time within countries if democratization is not the catalyst? By revisiting Latin America’s fiscal history, as well as that of several European, Middle Eastern and African countries, I provide an answer: It is when the economic elite anticipate greater returns from an investment in human capital that the persistent barriers to progressive taxation are finally razed.

Dissertation Committee: Stephen Haber (chair), David Laitin, Gavin Wright and Ken Schultz