American Economic Journal:
Applied Economics
ISSN 1945-7782 (Print) | ISSN 1945-7790 (Online)
Globalization, Capital Taxation, and Development: Evidence from a Macrohistorical Database
American Economic Journal: Applied Economics
(pp. 509–49)
Abstract
This paper builds and analyzes a new global macrohistorical database of effective tax rates on capital and labor in 154 countries. We establish a new stylized fact: While effective capital tax rates fell in developed countries between 1965 and 2018, they rose in developing countries after 1990. Multiple country-, sector-, and firm-level research designs suggest that trade openness contributed to this rise by increasing the share of output produced in corporations and larger firms, where effective capital taxation is higher. In contrast to a common view, globalization appears in many countries to have supported governments' ability to tax capital.Citation
Bachas, Pierre, Matthew Fisher-Post, Anders Jensen, and Gabriel Zucman. 2026. "Globalization, Capital Taxation, and Development: Evidence from a Macrohistorical Database." American Economic Journal: Applied Economics 18 (4): 509–49. DOI: 10.1257/app.20240746Additional Materials
JEL Classification
- F41 Open Economy Macroeconomics
- F62 Economic Impacts of Globalization: Macroeconomic Impacts
- H24 Personal Income and Other Nonbusiness Taxes and Subsidies; includes inheritance and gift taxes
- H25 Business Taxes and Subsidies including sales and value-added (VAT)
- O19 International Linkages to Development; Role of International Organizations
- O23 Fiscal and Monetary Policy in Development