The ability of governments to raise revenue to finance spending varies greatly across the industrialized democracies. Despite the prediction of the globalization thesis, variation in budget deficits and public debt has actually increased. While a developed literature has attempted to explain fiscal performance, there has been little attention to the role of that the welfare state might have. Meanwhile, the welfare state literature has focused on welfare spending with less attention to how such spending is financed. This presentation shows that the two are linked. Governments can use taxes not only as a source of revenue but also as a means to achieve redistributive goals directly by targeting tax relief to specific groups. Using quantitative data and a case study of Japan and Sweden, this study shows how governments combine welfare and tax policies, i.e., the “tax-welfare mix,” shapes their long-term extractive capacity.
Gene Park is an assistant professor in the department of political science at Loyola Marymount University (LMU). Prior to arriving at LMU, he taught at Baruch College, City University of New York. Previously, Dr. Park was Shorenstein Fellow at Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center and a visiting scholar at the Japanese Ministry of Finance’s Policy Research Institute. He specializes in comparative political economy and has an area interest in Japan. His research focuses on the politics of public spending and taxation. He is the author of Spending without Taxation: FILP and the Politics of Public Finance in Japan (Stanford University Press, 2011). He is currently working on a comparative study of fiscal consolidation and a comparative study of state extractive capacity.