TITLE:
National Identity, Revolt and Taxation
AUTHORS:
Chee Meng Tan, Vengadeshwaran Sarma
KEYWORDS:
National Autocracy, National Identity, Taxation, Revolt
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.14,
October
20,
2018
ABSTRACT: This paper investigates the
impact of national pride on the likelihood of revolt. We propose a sequential
game with a representative rich agent who decides and implements the tax rate,
and a representative poor agent who either launches a revolt to oust the rich
or accepts income redistribution. Using the economics of identity, the poor’s
utility not only depends on agent income but on the utility from national
identification. We demonstrate that the likelihood of revolt by the poor and
the tax rate that the rich needs to implement to avert a revolt decreases with
national pride. We substantiate these results using logit regression analysis
applied to data in the World Value Survey.