Linking war, natural resources and public revenues: the case of the War of the Pacific (1879-1883)
(2020) In STANCE Working Paper Series 2020-2021(1). p.1-54- Abstract
- We argue that wars over natural resources, even if they are limited in their military scope, can have long-term consequences on the level and composition of public revenues. Military success in a resource war may lead to the annexation of natural resource-rich areas from enemy combatants, which provides the winning coalition with valuable and easy-to-tax sources of income. This, however, might discourage new investments in administrative capacity that jeopardize the possibility to establish complex and politically costly taxes in the long-term. This was the case in Chile after it took over the Bolivian and Peruvian coastal regions during the War of the Pacific (1879-1883). In Peru, by contrast, the loss of its nitrate-rich areas brought... (More)
- We argue that wars over natural resources, even if they are limited in their military scope, can have long-term consequences on the level and composition of public revenues. Military success in a resource war may lead to the annexation of natural resource-rich areas from enemy combatants, which provides the winning coalition with valuable and easy-to-tax sources of income. This, however, might discourage new investments in administrative capacity that jeopardize the possibility to establish complex and politically costly taxes in the long-term. This was the case in Chile after it took over the Bolivian and Peruvian coastal regions during the War of the Pacific (1879-1883). In Peru, by contrast, the loss of its nitrate-rich areas brought its fiscal system to the brink of collapse. The impact of the conflict on the Bolivian fiscal system was milder owing to its initial low level of state capacity to control these coastal regions. (Less)
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https://lup.lub.lu.se/record/3faca7e7-aa05-4cf2-8e2e-99901833fbfd
- author
- Sabate Domingo, Oriol LU and Peres-Cajías, José
- organization
- publishing date
- 2020-05
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- fiscal capacity, warfare, nineteenth century, Latin America, War of the Pacific
- in
- STANCE Working Paper Series
- volume
- 2020-2021
- issue
- 1
- pages
- 54 pages
- project
- State-Making and the Origins of Global Order in the Long Nineteenth Century and Beyond
- language
- English
- LU publication?
- yes
- id
- 3faca7e7-aa05-4cf2-8e2e-99901833fbfd
- date added to LUP
- 2020-05-11 10:33:03
- date last changed
- 2021-03-22 21:29:31
@misc{3faca7e7-aa05-4cf2-8e2e-99901833fbfd, abstract = {{We argue that wars over natural resources, even if they are limited in their military scope, can have long-term consequences on the level and composition of public revenues. Military success in a resource war may lead to the annexation of natural resource-rich areas from enemy combatants, which provides the winning coalition with valuable and easy-to-tax sources of income. This, however, might discourage new investments in administrative capacity that jeopardize the possibility to establish complex and politically costly taxes in the long-term. This was the case in Chile after it took over the Bolivian and Peruvian coastal regions during the War of the Pacific (1879-1883). In Peru, by contrast, the loss of its nitrate-rich areas brought its fiscal system to the brink of collapse. The impact of the conflict on the Bolivian fiscal system was milder owing to its initial low level of state capacity to control these coastal regions.}}, author = {{Sabate Domingo, Oriol and Peres-Cajías, José}}, keywords = {{fiscal capacity; warfare; nineteenth century; Latin America; War of the Pacific}}, language = {{eng}}, note = {{Working Paper}}, number = {{1}}, pages = {{1--54}}, series = {{STANCE Working Paper Series}}, title = {{Linking war, natural resources and public revenues: the case of the War of the Pacific (1879-1883)}}, url = {{https://lup.lub.lu.se/search/files/88003167/WP_41_Sabate_and_Peres_Cajias_Linking_War_Natural_Resources_and_Public_Revenues_The_Case_of_the_War_of_the_Pacific_1879_1883_.pdf}}, volume = {{2020-2021}}, year = {{2020}}, }