Tax collection in the Roman Empire: a new institutional economics approach

• Published in: Constitutional political economy Vol. 33; no. 3; pp. 378 - 401
• Main Authors: Gutiérrez, Óscar, Martínez-Esteller, Marco
• Format: Journal Article
• Language: English
• Published: New York Springer US 01.09.2022; Springer Nature B.V
• Subjects: Auctions; Bureaucracy; Censuses; Collection; Colonies & territories; Constitutional Law; Economic theory; Economic Theory/Quantitative Economics/Mathematical Methods; Economics; Efficiency; Evolution; Farmers; Farming; Governors; Management; Original Paper; Political Science; Political Science and International Relations; Political Science and International Studies; Property rights; Provinces; Roman civilization; Tax collections; Taxation; Taxes; Incomplete contracts; D73; New institutional economics; D23; Roman Republic; Tax-farmers; Principality; N23; Moral hazard
• ISSN: 1043-4062; 1572-9966
• DOI: 10.1007/s10602-021-09355-5

This paper reviews the Roman tax collection system since the Late Republic to the Principality, focusing on the transition from the tax-farming system to a more centralized, census-based administration. We attempt to justify this transition according to New Institutional Economic theories (Transaction Cost Economics and Property Rights Theory). The paper argues that, during the Republic, the auction-based system of tax farming ended up giving place to opportunistic behaviors and abusing practices due to information asymmetries and contract incompleteness, enhanced by the collusion of tax farmers and governors. The Principality improved the efficiency of the tax collection system through the introduction of a bureaucratic and census-based administration, which allowed imperial employees to monitor the tax-farming activities.