In defense of the Articles of Confederation and the contribution mechanism as a means of government finance: A general comment on the literature

Abstract

I attempt to dispel several widely-held myths regarding government finance under the Articles of Confederation, some of which were reiterated in Dougherty and Cain (1997). I defend the contribution mechanism as a method of government finance that is superior to direct taxation by the federal government, and present evidence contradicting the belief that revenue collections under the Articles were poor. A proper comparison is with alternatives at that time, such as state tax collections and the federal governments own tax collections under the new U.S. Constitution, both of which were lower than the collection rate from states under the Articles.