The sources of particularistic tax policy: evidence from legislator amendments in Argentina

The literature on the political economy of tax policymaking argues that particularistic tax policies are generated by the combination of interest group pressures on legislators and legislator incentives to represent the economic interests of their constituencies. This literature has produced scant longitudinal evidence in support of these propositions, due to the difficulties in collecting cross-time data on tax bills and their legislative processes, which has led scholars to focus on case studies or small-N comparisons. This paper overcomes those difficulties by using a database on all executive-sponsored tax bills and all legislator-sponsored bills reported by committees in the Argentine Chamber of Deputies between 1983 and 2011, which includes complete information about all substantive dimensions of tax policy, all amendments proposed and introduced through the lawmaking process, and the final outcomes. In contrast with case study findings, our analysis shows that particularistic tax bills and amendments are introduced and passed by legislators regardless of ideology, macroeconomic contexts, partisan configurations of Congress and the executive, and the existence of majority or plurality legislative cartels. We contribute to the literature on the political economy of tax lawmaking by proposing a methodology for cross-time analysis and generating theoretically consistent large-scale evidence on tax particularism.