Working Paper 333 - Corruption and Tax Morale in Africa

Amadou Boly, Maty Konte () and Abebe Abebe

Working Paper Series from African Development Bank

Abstract: This paper analyzes the effect of the quality of governance (proxied by perceived corruption) on attitudes toward paying taxes. Using the Afrobarometer surveys from 36 African countries, over the period 2011-2015, we find that a perception of low corruption at different levels of the executive branch (president's office, government officials, or tax authorities) has a significant and positive impact on tax morale. To account for possible reverse causality between a citizen's perception of governance quality and attitude toward tax payment, we also propose an instrumental variables (IV) approach, using the ethnicity of the country's leader as an instrument for perceived level of corruption, the assumption being that individuals from the same ethnic group tend to have a favorable perception of concurrent governance. The IV results confirm that an individual's positive perception of governance has a positive impact on one's willingness to pay taxes.

Keywords: corruption; taxation; governance; Africa JEL Classification: D73; H71; O55 (search for similar items in EconPapers)
Date: 2020-05-25
New Economics Papers: this item is included in nep-afr, nep-dev, nep-iue and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:adb:adbwps:2459

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