Political fragmentation and the evolution of national tax structures in the OECD

This paper considers how tax structures in OECD countries change over time and how these changes are related to political fragmentation. Tax structure s amongst OECD countries have become more uniform in the recent past (1965- 1995) but it is less clear that this convergence satisfies time-series requ irements. Evidence on stochastic convergence tends to suggest that there is evidence of persistence of shocks remaining over a considerable time perio d. A consideration of the countries where this persistence is most prevalen t shows that there is significant correlation between high persistence and weak (coalition) governments, giving further weight to the theories of weak government.