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Monopoly of Taxation Without a Monopoly of Violence: The Weak State's Trade-Offs From Taxation

Lookup NU author(s): Dr Soeren HennORCiD

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Abstract

This study presents a new economic perspective on state-building based on a case study in the Democratic Republic of the Congo's hinterland. We explore the implications for the state of considering rebels as stationary bandits. When the state, through a military operation, made it impossible for rebels to levy taxes, it inadvertently encouraged them to plunder the assets of the very citizens they previously preferred to tax. When it negotiated with rebels instead, this effect was absent, but negotiating compromised the state's legitimacy and prompted the emergence of new rebels. The findings suggest that attempting to increase taxation by a weak state in the hinterland could come at the expense of safety in the medium term and of the integrity of the state in the long term.

Publication metadata

Author(s): Henn SJ, Mastaki Mugaruka C, Ortiz M, Sánchez de la Sierra R, Wu DQ

Publication type: Article

Publication status: Published

Journal: Review of Economic Studies

Year: 2025

Volume: 92

Issue: 2

Pages: 1126–1156

Print publication date: 01/03/2025

Online publication date: 28/05/2024

Acceptance date: 25/05/2024

Date deposited: 14/06/2024

ISSN (print): 0034-6527

ISSN (electronic): 1467-937X

Publisher: Oxford University Press

URL: https://doi.org/10.1093/restud/rdae036

DOI: 10.1093/restud/rdae036

ePrints DOI: 10.57711/ejnv-3y23

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