The Fiscal Crisis of the Old Regime
The Fiscal Crisis of the Old Regime
This chapter provides a historical overview of the systemic fiscal crisis that triggered the collapse of communism and the emergence of postcommunist states. It examines postcommunist state building amid the fiscal crisis and how the communist state effectively restructured its revenue base to gain direct access to societal wealth. It also considers the fiscal abyss experienced by Poland and the Soviet Union as the old regime attempted to sustain a reward-based political compliance strategy with an economic system incapable of regenerating growth. Finally, it discusses the role of taxation in the command economy and how the negative fiscal trends that instigated the collapse of the old regimes were exacerbated by political upheaval and economic transformation.
Keywords: fiscal crisis, communism, postcommunist state, state building, revenue base, Poland, Soviet Union, political compliance, taxation, command economy
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