Technology and the state: Building capacity to tax via text

Isabelle Cohen

Journal of Public Economics, 2024, vol. 236, issue C

Abstract: The ability of the state to collect tax revenue is a crucial indicator in the process of economic development, yet the functioning of tax compliance in low-capacity countries remains poorly understood. Using a randomized evaluation, I study a simple text message reminder scheme implemented by the Uganda Revenue Authority, which increases tax compliance by 7%. This average effect masks substantial treatment effect heterogeneity by an index of the presence of public services, measured via a granular, nationwide dataset on government service provision. The finding that the treatment was most effective where the state is least present shows how digital technology can extend beyond the brick-and-mortar presence of the government, expanding the reach of the state.

Keywords: Taxation; State capacity; Fiscal exchange; Developing countries; Service provision (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:236:y:2024:i:c:s0047272724000902

DOI: 10.1016/j.jpubeco.2024.105154

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