The practice of assigning the responsibility for tax collection to private individuals or groups, who then remit a fixed sum to the state and are permitted to retain any surplus they can collect, represents a significant historical economic model. This system, where the right to collect revenue is auctioned off, incentivized aggressive collection methods. An example is found in the Roman Empire, where publicani contracted with the state to gather taxes, often resulting in exploitation of the populace to maximize their personal profit.
This revenue collection method held importance in various historical contexts, providing states with a guaranteed income stream while shifting the administrative burden of collection. It facilitated revenue generation, especially in contexts where centralized bureaucratic structures were weak or non-existent. Historically, it was beneficial to empires seeking to expand or maintain their territories, providing a readily available source of funds. However, inherent in this system were risks of corruption, abuse of power, and economic hardship for the taxpaying population.
