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Cliometrica

, 3:97 | Cite as

The fiscal impact of the War of the Pacific

  • Richard Sicotte
  • Catalina Vizcarra
  • Kirsten Wandschneider
Original Paper

Abstract

In the War of the Pacific (1879–1883), Chile defeated Peru and Bolivia, and acquired territories that contained vast deposits of sodium nitrate, a leading fertilizer. Chile’s export tax on nitrates later accounted for at least one half of all government revenue. We employ a multi-country model of export taxation in order to simulate the potential government revenues that Bolivia, Chile and Peru could have earned under the counterfactual scenario that Chile did not conquer the nitrate-rich provinces of its adversaries. Our results are that Peruvian and Bolivian government revenues could have been at least double their historical levels. We estimate that, over the remainder of the nineteenth century, Chile’s earnings from nitrates would have fallen by 80%.

Keywords

Export tax Nitrates War of the Pacific South America 

JEL Classification

C72 F13 F14 F17 H21 N46 N76 

Notes

Acknowledgments

The authors would like to thank Mauricio Drelichman, Bill Gibson, Marc Law, Art Woolf, Kamil Yilmaz, and participants in the 2005 Canadian Network for Economic History conference, the 2007 Economic History Association conference, and the University of Massachusetts-Amherst economic history workshop for helpful comments on previous versions of the paper. We would also like to thank Matthias Aschenbrenner for assistance with the simulations.

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Copyright information

© Springer-Verlag 2008

Authors and Affiliations

  • Richard Sicotte
    • 1
  • Catalina Vizcarra
    • 1
  • Kirsten Wandschneider
    • 2
  1. 1.University of VermontBurlingtonUSA
  2. 2.Occidental CollegeLos AngelesUSA

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