Tax structure, size of government, and the extension of the voting franchise in Western Europe, 1860-1938

We study the consequences of the extension of the voting franchise for the size of (central) government and for the tax structure in ten western European countries, 1860-1938. The main hypothesis under investigation is that the impact of the franchise extension on the tax structure is conditional on tax collection costs. We find that the share of direct taxes (including the personal income tax) is positively affected by the franchise extension, but only if relative tax collection costs are below a given threshold. We use literacy as a proxy for the cost of levying a broad-based income tax. We also show that the gradual relaxation of income and wealth restrictions on the right to vote contributed to growth in total government spending and taxation.