Of Rule and Revenue

Of Rule and Revenue

Of Rule and Revenue

Of Rule and Revenue


Margaret Levi's wide-ranging theoretical and historical study demonstrates the importance of political relative to economic factors in accounting for revenue production policies.


The history of state revenue production is the history of the evolution of the state. As specialization and division of labor increase, there is a greater demand on the state to provide collective goods where once there were solely private goods or no goods at all. the introduction of economies of scale in the production of state-provided goods and services augments the state’s ability to provide collective goods. Improvements in state coordination of people and resources further enhance state capacity. Constituents may come to perceive gains from trade. Certainly, they become more dependent on the state. At the foundation of increases in a state’s provision of goods and services is its revenue production system.

The state is a complex institution that has undergone numerous transformations in size, function, and organization over the centuries. What characterizes a state is territorially bounded and centralized regulation of important aspects of social life (Mann 1986, 26–27). the object of state regulations changes with time and place. However, all states attempt to monopolize the concentrated means of violence within a given territory. All implement and enforce property rights and other formal rules, including rules concerning the extraction of revenue.

This definition makes it possible to determine where a state exists or, at

This statement is obviously derived from Weber’s classic formulation. However, I eschew the word legitimate, at least until the term acquires a consensual meaning.

Ostrom (1985, 465) defines rules as “prescriptions about what behaviors (or states of the world) are required, prohibited, or permitted.” For an interesting discussion of rules from the constitutionalist perspective, see Brennan and Buchanan (1985). Their agenda is primarily normative, but they make some important points for positive analysis.

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