Fiscal Choices and Economic Outcomes
Chapter 10: Conclusion
Every type of political regime has had its defenders, not all of whom were paid apologists. A comparison of the major types of regimes, however, has been complicated by two conditions: the conceptual case for each type of regime was often made on diﬀerent grounds, and a comparison of the outcomes of the diﬀerent regimes is complicated by diﬀerent initial conditions and diﬀerent economic eﬀects of the primary ﬁscal decisions. For these reasons, the evaluation of the major types of political regimes in this book is based on a common standard, the same initial conditions, and the same relation between the ﬁscal choices and economic outcomes. The strength and breadth of the conclusions from this analysis suggests that this has been a worthwhile endeavor. ON THE CHOICE OF REGIMES A comparison of the major types of political regimes, such as summarized in Chapter 4, presents a sharp contrast of the ﬁscal choices and economic outcomes. Autocracy An autocratic government will choose a level of general government expenditures and a tax rate to maximize the net income of the autocracy. This leads an autocratic government to choose a relatively low level of expenditures for government services to the general population, because it values these services only to the extent that they add to the net income of the autocracy. For the same reason, an autocratic government will 107 108 Autocratic, Democratic, and Optimal Government not tax the autocracy but will levy a revenue-maximizing tax rate on...
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