Historical Evolution of Taxation and Public Expenditure: A Global and Indian Perspective

Abstract

Taxation and public expenditure are two cornerstones of modern governance and economic development. Their origins, however, lie in the earliest organized human societies, where the collection and redistribution of resources played critical roles in building administrative capacity, maintaining social order, and asserting sovereignty. This paper explores the historical evolution of taxation and public expenditure from ancient civilizations to contemporary nation-states, with a particular focus on both global trajectories and the Indian context. It also reviews the classical and neoclassical economic theories that have provided the intellectual scaffolding for understanding fiscal systems. Drawing on examples from Mesopotamia, Egypt, Greece, Rome, medieval Europe, and India—from the Mauryan Empire to the British Raj—the paper demonstrates how fiscal practices evolved in tandem with political, cultural, and economic changes. The theoretical contributions of Adam Smith, Pigou, Samuelson, and others are also examined to underscore how foundational ideas continue to inform public finance in today’s economies.