Why Not Taxation and Representation? A Note on the American Revolution

NBER Working Paper No. 22724

Issued in October 2016, Revised in January 2018

NBER Program(s):Development Economics



Why did the most prosperous colonies in the British Empire mount a rebellion? Even more puzzling, why didn’t the British agree to have American representation in Parliament and quickly settle the dispute peacefully? At first glance, it would appear that a deal could have been reached to share the costs of the global public goods provided by the Empire in exchange for more political autonomy and/or formal representation for the colonies. (At least, this was the view of men of the time such as Lord Chapman, Thomas Pownall and Adam Smith.) We argue, however, that the incumbent government in Great Britain, controlled by the landed gentry, feared that giving political concessions to the colonies would undermine the position of the dominant coalition, strengthen the incipient democratic movement, and intensify social pressures for the reform of a political system based on land ownership. In particular, allowing Americans to be represented in Parliament was problematic because American elites could not credibly commit to refuse to form a coalition with the British opposition. Consequently, the only realistic options were to maintain the original colonial status or fight a full-scale war of independence.

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Document Object Identifier (DOI): 10.3386/w22724

Published: "Why not taxation and representation? A note on the American Revolution." Journal of Economic Behavior and Organization, Volume 166, 2019, pages 28-52

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