Didac Queralt

• Ph.D. in Political Science, NYU
• Professor (Assistant) at Yale University

In this article I revisit the relationship between war and state making in modern times by focusing on two prominent types of war finance: taxes and foreign loans. Financing war with tax money enhances the capacity to assess wealth and monitor compliance, namely fiscal capacity. Tax-financed war facilitates the adoption of power-sharing institution...

This article examines the adoption of income taxes in Western economies since the 19th century. We identify two empirical regularities that challenge predictions of existing models of taxation and redistribution: While countries with low levels of electoral enfranchisement and high levels of landholding inequality adopt the income tax first, countr...

Anticipated trade, insurance, and fiscal shocks from independence structure preferences for secession independently from nonmaterial considerations. To test this claim, we draw from an original survey conducted in Catalonia before the 2017 regional election , which followed a suspended declaration of independence. Trade shocks produce differential...

This paper presents a theory explaining how trade policy is contingent on the development of fiscal capacity. The paper investigates the conditions under which mercantilism is adopted as a substitute for taxation when fiscal capacity is weak, when mercantilist revenue is reinvested in developing fiscal capacity, and when economies endogenously aban...

Our understanding of state development—a term that encompasses both state formation and state building—has grown significantly in the last two decades. In this review, I outline the foundations of the literature and identify major conceptual and analytical advancements since the early 2000s, including the development of capacity investment models,...

This chapter covers the mechanisms of persistence, which are the reason for the lasting effects of war finance. It highlights the two channels or mechanisms of transmission that help war finance shape fiscal capacity. The first mechanism builds on the political repercussions of domestic resource mobilization, which increases the risk of tax bargain...

This chapter focuses on the characteristics of the Bond Era while considering the difference between developmental and revenue finances under the notion of state building. It then examines the first global financial market 1816–1914 by referencing the expansion of capital exports and the secular decline of interest rates in sovereign lending. Publi...

This chapter tackles the short- and long-term repercussions of external capital access on fiscal capacity, which is the ability to raise taxes. It also cites that war finance is consequential for state building. Moreover, access to external finance during wartime in the Bond Era decreased the likelihood of strengthening fiscal capacity. Thus, war f...

This chapter argues that foreign financial control (FFC) played a key role in pushing countries into a debt trap. Foreign financial control is seldom viewed as the culmination of financial imperialism. Thus, foreign control over the finances of a sovereign nation was never taken lightly in the Bond Era since the interventions might be interpreted a...

This chapter elaborates on the concept of extreme conditionality in international lending. It discusses the conditions under which private bondholders took over local assets. The conditions of developing nations accessing external finance are crucial to understanding the persistence of limited state capacity in emerging economies. Moreover, pledgin...

This chapter expounds on the nature and finance of war beyond Europe. It cites that interstate war is the main driver of state building. To cover military expenses, governments regularly floated loans overseas to cope with this fiscal shock. The chapter reflects upon the consequences of external war finance for long-term state capacity by referenci...

This chapter discusses the trajectories of state building opportunities being shaped by initial conditions. It examines case studies from Argentina, Chile, Ethiopia, Japan, and Thailand regarding the effects of war on fiscal capacity and their transmission. The comparison between Japan and Argentina sheds light on the significance of domestic credi...

This chapter explores the political economy of public finance. It tackles the legacy of war finance on statebuilding. In response, foreign investors devised the mechanism of extreme conditionality in an effort to minimise risk. The chapter elaborates on the public finance dilemma of financing the war with taxes or foreign debts, which primarily cor...

Governments can grant political concessions to induce quasi-voluntary compliance with taxation, yet empirical evidence probing the taxation-representation connection remains inconclusive. We contend that this association remains valid but it is primarily confined to business elites in nondemocratic regimes because the same wealth that exposes them...

The income tax is a central pillar of the modern fiscal state because of its revenue- raising capacity and administrative sophistication. Existing accounts point to interstate war and class conflict as key drivers of modern fiscal breakthroughs, but we evaluate a third explanation for the origins of fiscal capacity that highlights the importance of...

How do rulers raise taxes when the fiscal capacity of the state is weak? I argue that, in conditions of low fiscal capacity, rulers might secure high tax yields by granting protection from competition to key domestic producers. I offer qualitative evidence of this exchange in the developing world today and test the theory against a sample of thirty...

This paper examines the adoption of income taxes by Western economies since the 19th century. We identify two empirical regularities that challenge predictions of existing models of taxation and redistribution: while countries with low levels of electoral enfranchisement and high levels of landholding inequality adopt the income tax first, countrie...

This work evaluates the receptivity of the Spanish electorate to policy positions that are distant from the status quo. To that end, two spatial voting models are considered: the proximity and the directional model. The analysis also evaluates the econometric consequences of employing subsidiary measures of the status quo in policy spaces. The resu...

This paper assesses whether economic voting plays any role in a parliamentary, decentralized polity. Decentralization is argued to blur lines of responsibility and confuse voters about whom to blame for poor economic performance at the national and regional levels. National and Regional Economic Voting (NEV and REV, respectively) are tested in Cata...

In this study I claim that the electoral processes following legislative decentralization to regional and local tiers of government can enhance the opportunities voters face to learn the magnitude of the mechanic eects of electoral systems. Concretely, by voting at subnational elec- tions ruled by similar electoral systems to the national ones, vot...

Conventional explanations of democratization assume a hike in taxation following suffrage extension. As the median voter grows poorer, the preference for redistribution rises and so does taxation. This paper presents a theoretical and empirical challenge of this proposition. In particular, we argue that taxation might be utilized precisely to delay...