Against failed states: the constitutional consequences of fiscal earmarking, underspending and remobilisation

Abstract Why do states under-expend? Conventional explanations point to institutional failures. By contrast, drawing on the case of cesses in Indian tax history and practice, I take underspending not only as symptomatic of flaws in state administration, but also as constitutive of state forms. In this specific case, I argue that the underspending of earmarked funds, and their consequent pooling and remobilisation, produce a bifurcated state through its revenue arrangements. This argument is of substantive value, but it is also in the service of a broader conceptual move: reinterpreting something that might conventionally be understood as a marker of state failure or dysfunction, as in fact constitutive of the state. Finally, the argument also has a methodological dimension. In order to execute this redescription, I draw on a mix of archival material and analysis of case law. This extends an insight from tax law scholarship on the importance of a multi-disciplinary methodological apparatus to bring tax and constitutional scholarship together.