Market Transition, Taxation and Authoritarian Durability: Reexamine the Infrastructural State Power Mechanisms

• In Event: Between Infrastructural and Despotic Power: Examining State Capacities of Authoritarian China

Abstract

Under the “institutional turn” of comparative authoritarianism studies, infrastructural state power (state capacities) is regarded as playing important role in maintaining authoritarian durability, but its mechanisms are still under-studied with few exceptions. This paper takes taxation institution, an important state institution that emphasized by Weber, Schumpeter and Elias, to examine the Chinese state capacity and how it contributes to authoritarian resilience under market transition in China.
Since the early 1980s, the Chinese government initiated a series of fiscal and taxation reform which is widely regarded as the institutional foundation for economic growth in China. As a result, the Chinese government is able to extract more and more tax revenue from the private economy. This improved state taxation capacity is regarded to play an important role in sustaining authoritarian rule in many ways.
However, the dilemma is that transition from a communist state that had very limited reliance on taxation to a tax state that relies heavily on tax revenue may weaken the state’s despotic power: the state needs to negotiate with the tax payers to get their quasi-voluntary compliance, which may weaken the authoritarian rule. Based on intensive fieldworks, the author argues that an under-institutionalized taxation system helps the Chinese government resolves this dilemma through two mechanisms, patron-clientelism and hidden bargaining.

Author

• Changdong Zhang, Peking University