From internal taxes to national regulation: Evidence from a French wine tax reform at the turn of the twentieth century

Raphaël Franck, Noel D. Johnson*, John V.C. Nye

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

The growth of the modern regulatory state is often explained in terms of an unambiguous increase in regulation driven by the actions of central governments. Contrary to this traditional narrative, we argue that as governments increased state capacity, they often strove to weaken the autarkic tendencies of regional laws, thereby promoting greater trade and a more integrated market. To show this, we exploit a quasi-natural experiment generated in the French wine industry by a law implemented on 1 January 1901 which lowered and harmonized various local tax rates.We demonstrate that high internal taxes on wine, set by regional governments, discouraged trade and protected small producers of expensive and low quality wines. We then trace how the political response to this tax decrease led to increases in wine regulation.

Original languageAmerican English
Pages (from-to)77-93
Number of pages17
JournalExplorations in Economic History
Volume51
Issue number1
DOIs
StatePublished - Jan 2014
Externally publishedYes

Keywords

  • Market integration
  • Regulation
  • State and local taxation

Fingerprint

Dive into the research topics of 'From internal taxes to national regulation: Evidence from a French wine tax reform at the turn of the twentieth century'. Together they form a unique fingerprint.

Cite this