---
entity_slug: tax_farming
evaluator: null
evaluated_at: '2026-02-23T06:29:32.689038'
overall_score: 4.8
scores:
- name: definition_precision
  value: 5.0
  max_value: 5.0
  rationale: The definition is highly precise and non-circular, clearly distinguishing
    tax farming from direct government collection by specifying the key mechanism
    (leasing collection rights for fixed rent with profit incentive). It captures
    a distinct institutional arrangement rather than a vague concept.
- name: source_grounding
  value: 5.0
  max_value: 5.0
  rationale: Tax farming is explicitly discussed by Smith in Book V, Chapter 2, where
    he provides detailed criticism of this practice as used in various European countries.
    The definition accurately reflects Smith's analysis of the mechanism and its problems.
- name: domain_placement
  value: 5.0
  max_value: 5.0
  rationale: '"General Theory" is the appropriate domain placement as tax farming
    represents a fundamental institutional mechanism for revenue collection that Smith
    analyzes as part of his broader theoretical framework on public finance. It''s
    not specific to any particular economic sector but rather a general governmental
    practice.'
- name: vsm_relevance
  value: 4.0
  max_value: 5.0
  rationale: Tax farming maps well to S3 (internal regulation/audit) as it represents
    an alternative mechanism for the state to monitor and extract resources from its
    economic environment. The delegation of collection authority and the resulting
    control problems are classic S3 concerns about internal regulation and oversight.
- name: explanatory_value
  value: 5.0
  max_value: 5.0
  rationale: This entity provides significant explanatory power by illuminating the
    structural relationship between incentive design and administrative outcomes in
    public finance. It reveals how institutional arrangements can create systematic
    distortions and oppression, making it a key mechanism in Smith's analysis of effective
    governance.
---

# Evaluation: Tax Farming

## definition_precision — 5.0 / 5.0

The definition is highly precise and non-circular, clearly distinguishing tax farming from direct government collection by specifying the key mechanism (leasing collection rights for fixed rent with profit incentive). It captures a distinct institutional arrangement rather than a vague concept.

## source_grounding — 5.0 / 5.0

Tax farming is explicitly discussed by Smith in Book V, Chapter 2, where he provides detailed criticism of this practice as used in various European countries. The definition accurately reflects Smith's analysis of the mechanism and its problems.

## domain_placement — 5.0 / 5.0

"General Theory" is the appropriate domain placement as tax farming represents a fundamental institutional mechanism for revenue collection that Smith analyzes as part of his broader theoretical framework on public finance. It's not specific to any particular economic sector but rather a general governmental practice.

## vsm_relevance — 4.0 / 5.0

Tax farming maps well to S3 (internal regulation/audit) as it represents an alternative mechanism for the state to monitor and extract resources from its economic environment. The delegation of collection authority and the resulting control problems are classic S3 concerns about internal regulation and oversight.

## explanatory_value — 5.0 / 5.0

This entity provides significant explanatory power by illuminating the structural relationship between incentive design and administrative outcomes in public finance. It reveals how institutional arrangements can create systematic distortions and oppression, making it a key mechanism in Smith's analysis of effective governance.
