The Political Economy of Tobacco Taxation: Essays in Public Choice

Patricia Moser

Advisor: John V.C. Nye, PhD, Department of Economics

Committee Members: Daniel E. Houser, John N. Paden, Mark Koyama

Buchanan Hall, #D180
November 28, 2017, 03:00 PM to 05:00 PM


Tobacco taxes have a long and nearly universal history of being used by countries as a source of government revenue and, in recent decades, as a tool for reducing tobacco use. Yet, while a robust literature exists on tobacco taxation and its impacts on smoking, little research has been undertaken on the determinants of tobacco taxes themselves. This dissertation extends the literature by using public choice theory as the basis for examining the political economy of cigarette taxes in a cross-country context. The paper defines and empirically tests two theoretical models of tobacco taxation: a medium voter theorem (MVT) model of public interest regulation and a special interests model that looks at tobacco producer influences. Panel data are developed for 157 countries for the period 1996 – 2014, combining new sources of information on smoking and cigarette taxation with political, economic, agricultural and demographic data. Findings from this work have important implications for public health and fiscal authorities in determining the tax regimes for tobacco.