Published In
Asia-Pacific Tax Bulletin
Document Type
Working Paper
Publication Date
2025
Subjects
China, Self-Assessment, State Capacity, Tax Administration, Tax and Development
Abstract
The Administrative Foundations of the Chinese Fiscal State (Cambridge University Press 2022) explores how China developed a tax system to support its economic transformation. Among scholars who study taxation and economic growth, a familiar idea is that it is generally very difficult for poor countries to develop the state apparatus needed to raise revenue. The lack of revenue, in turn, prevents governments from providing critical public goods and services needed to spur economic growth. State capacity in taxation, therefore, is a major determinant of which countries become prosperous and which do not. An obvious question, then, is whether the evolution of Chinese state capacity in taxation has broader lessons to offer developing countries.
For readers interested in tax and development, the book presents two main discoveries. First, a fundamental distinctive feature of how China developed its fiscal capacity is how it initially embraced, and then abandoned, the paradigm of self-assessment. The story of this choice has not previously been told anywhere. The reason for the neglect, the book argues, lies in deficiencies in the theory or language conventionally used to analyze tax administration generally. Second, scholarship on tax and development, as well as policy advice rendered by international organizations, often equivocates on the meaning of state capacity, thereby sidestepping many of the important choices that policymakers in developing countries actually confront. They rely on a language that obscures the significance of what happened (and is happening) in China—and, one suspects, elsewhere. The book urges all students of tax and development to distinguish between the varieties of state capacity more clearly.
Citation Details
W. Cui, "What Can One Learn from Chinese Tax Administration? A Precis of The Administrative Foundations of the Chinese Fiscal State (Cambridge University Press, 2022)" Asia-Pacific Tax Bulletin (IBFD) (forthcoming in 2025).