political developments in 76 countries for the period 1971-1982. Using a number of alternative definitions of the inflation tax … political environment tend to rely more heavily on the inflation tax. There is no evidence in favor of the weak government …

heavily on seignorage. This result is obtained within the context of a political model of tax reform. The model implies that … the more unstable and polarized the political system, the more inefficient is the equilibrium tax structure (in the sense … that tax collection is more costly to administer), and the higher therefore, the reliance on seignorage. This prediction of …

evidence indicates a positive effect of political instability on the demand for sovereign loans, as predicted by the theory …