The Founding Fathers understood that democracy — “government of the people, by the people, for the people” as Abraham Lincoln put it four score and seven years later — presupposes that people shoulder a set of responsibilities to govern themselves.
The Constitution limits the President’s ability to conduct wars and support a standing army. It explicitly leaves citizens with the responsibility to defend their country, as the Second Amendment sets forth the need for a well-regulated militia. The notion of a plowman-soldier was central to the American Revolution. George Washington was called Cincinnatus of the West, after a Roman farmer who twice led the Republic on the battlefield, subsequently returning to his plowshares.
Taxation = Representation
Naturally, early Americans were also finely attuned to the connection between taxation and self-rule. They had to be: the new nation effectively grew out of the Boston Tea Party with its battle cry “No Taxation without Representation.” Even earlier, British constitutional law was shaped by English monarchs’ need for a steady tax flow to pay for the Royal Navy (rather than relying mainly on manpower as Europe’s continental powers did). This required the crown to cooperate with wealthy barons and ultimately devolve power. That’s why Britain had the Magna Carta back in the 13th century, whereas France stayed absolutist.
The payment of taxes is an important responsibility of free citizens and a way of bringing them into the political process. He who pays for the music ultimately calls the tune.
Governments that rely on citizens to pay the bills tend to be more democratic. Industrialization led to democratization among Pacific Rim Tigers, countries such as Taiwan, South Korea and, more recently, Malaysia and Indonesia. Wealthier societies provide a more secure safety net, with more education, health care and other public benefits, which requires more taxes. Since taxes have to be collected from citizens, citizens get greater leverage vis-à-vis their rulers.
Countries that do not have a substantial industrial base but rely instead on the export of natural resources tend to be far less democratic, even if they grow quite wealthy from such exports and coddle their citizens. The list of oil exporters, from A for Algeria to V for Venezuela, is filled with oppressive regimes. Venezuela is a glaring example. While other Latin American countries have gotten rid of military juntas and charismatic leaders, Venezuela is ruled by a buffoonish strongman. It’s also the region’s largest oil exporter.
The problem is that oil exporters don’t have to ask their citizens for money. They tax their oil exports instead. Oil is a national resource, which ostensibly belongs to everyone but in reality allows governments to pay their bills without sharing power or accounting to their citizens. They don’t need their citizens’ cooperation, only obedience.
Russia is another case in point. During the 1990s oil prices were very low. After the collapse of the Soviet Union, industry was in shambles, citizens had no money, the government collected puny tax revenues and the country was poor. But it was moving toward democracy. Then, in 1999, oil prices began to climb, eventually reaching over $100 per barrel in recent years. In 2011, Russia is drowning in petrodollars and its Forbes list of dollar billionaires continues to expand. But Prime Minister Vladimir Putin, who initially maintained a fairly democratic system bequeathed by predecessor Boris Yeltsin, gradually throttled Russia’s nascent democracy and set up an oil-exporting kleptocracy in its place.