Scholars have recognized the formation of state fiscal capacity as a prerequisite for long-term economic development. Yet a nationwide fiscal centralization reform by the Qing government (1723–1735) failed to achieve the same purpose. Instead, we find that the centralization reform surprisingly led to more tax revolts. More frequent revolts were observed in areas where the central government broke its promise to compensate for local governments’ reform-induced losses in recent years. Furthermore, we find no increase in public good provision post-reform. We thus highlight that a fiscal centralization reform can only succeed with credible commitments from the central government.