Banking on redistribution in Latin America: Transaction costs, democracy, and fiscal redistribution in Latin America from 1808 to 2008

Do the poor soak the rich after a transition to democracy? I seek to answer that question by focusing attention on Latin America's political and fiscal history since independence. This is a highly unequal region of the world where we should not only expect redistribution after a democratic transition, but expect a whole lot of it. My dissertation argues and demonstrates that a democracy can only redistribute from the rich to the poor when a critical mass of citizens keeps their money in the bank, thus allowing the tax authorities to identify tax obligations, verify compliance, conduct audits, and deter evasion with self-assessed tax returns. It is the combination of the low enforcement costs provided by a large banking system and suffrage that is critical for diminishing inequality through the tax code.