This chapter identifies the book’s two basic aims: (1) explaining what policy makers and scholars interested in building tax capacity in developing countries may learn from the Chinese experience; and (2) articulating a framework for understanding the politics of taxation in China. It then explains how the unique approach of the book, which focuses on ground-level tax administration, serves these two aims. In relation to the first aim, the book will argue that contrary to assumptions in the current literature, there are fundamentally different types of state capacity in taxation, which follow potentially irreconcilable choices in the face of difficult trade-offs. In relation to the second aim, the book uses the structure of tax administration to illustrate the heterogeneity of political incentives within the Chinese state, critical information bottlenecks, and the political motives behind invocations of law. Unifying the pursuit of these two aims is a reflective conception of law as a special form of securing social order, which sees legal ordering as fundamentally different from social ordering based on state coercion. A summary of the ensuing chapters follows.

Chapter 8 explores the implications of the book’s narratives for the study and practice of taxation in developing countries. China has adopted taxes that are designed to be administered through self-assessment, while minimizing reliance on self-assessment. This essential modification of the modern tax paradigm has radical implications. First, it suggests substantial revisions to economic theories of tax administration and compliance. In particular, because self-assessment is quintessentially about complying with legal norms, modern taxation is deeply intertwined with legal systems: the Chinese case demonstrates how profoundly different a tax system is when severed from the legal system’s support – an idea that economic theories have ignored. Second, the evolution of Chinese tax administration both affirms and enriches a theory in political economy, namely that, to properly study tax and development, one must consider not only state capacity in tax collection, but also view such state capacity as endogenous with politics. Finally, one may query whether Chinese taxation will converge with more familiar tax paradigms. I argue that, to the contrary, technological developments could strengthen the tendency of China’s tax system to continue on its recent path; one can even ask whether other countries will converge to China’s model.