Allison Christians IWisconsin), Will Developed Countries Learn to Tax?:

In 1963, Nicholas Kaldor published a paper in Foreign Affairs about the ongoing fiscal problems of poor countries, entitled "Will Underdeveloped Countries Learn to Tax?"   It turns out Kaldor should have aimed this advice at his own country, as the rich world, confident in its fiscal advice to the poor throughout the 60s through the 90s, was busy eroding its own ability to finance the needs of the prosperous state and now must take its own medicine, to no one's liking. …

In a paper recently posted on NBER, Swiss economist Charles Wyplozs contemplates the chronic undertaxation self-imposed in rich countries, and comes to the same conclusion as Kaldor: Countries need revenues to build up a state that fosters economic growth and not catastrophic ruin.  They fail in this miserably because of political malfunction — every special interest group vies for favors and every politician vies for reelection by granting them.  This leads to what Wyplozs called a deficit bias. … [O]f course Wyplozs is right, every democracy will gravitate to an undertaxation situation because every democratic legislature has a K street and an upcoming election. …

So, will developed countries learn to tax?  Wyplozs seems to think there is potential if societies can figure out how to get a combination of good rules and good institutions in place to help governments reject "all favors, carrying out spending and transfers purely on the basis of welfare principles exactly as the mythical benevolent dictator would do."