Emily Sellars (Yale), "Fiscal Legibility and State Development: Theory and Evidence from Colonial Mexico" (joint with Francisco Garfias)
We examine how fiscal legibility, the ability of central authorities to observe local economic conditions for the purposes of taxation, shapes political centralization and state development. When rulers lack information about the periphery, they may cede autonomy to tax-collecting intermediaries to encourage fiscal performance. As information quality improves, rulers are better able to monitor and sanction local officials, allowing them to tighten control over taxation and establish more direct state presence. Centralization encourages additional investment in improving fiscal legibility, leading to long-term divergence in state development. We study the consequences of a technological innovation that dramatically improved the Spanish Crown's fiscal legibility in colonial Mexico: the discovery of the patio process to refine silver. We show that political centralization differentially accelerated in affected districts, that these areas saw disproportionate state investment in informational capacity, and that they were more resilient to institutional decline over a century later.
Co-sponsored by FAS and IQSS, the Alberto Alesina Seminar on Political Economy supports research-related activities that integrate the study of economics and politics, whether by studying economic behavior in the political process or political behavior in the marketplace. In general, positive political economy is concerned with showing how observed differences among institutions affect political and economic outcomes in various social, economic, and political systems and how the institutions themselves change and develop in response to individual and collective beliefs, preferences, and strategies.
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All interested faculty and students are invited to attend.
LOCATION:CGIS Knafel, room K354 STATUS:CONFIRMED DTSTART:20230309T213000Z DTEND:20230309T224500Z END:VEVENT END:VCALENDAR