The participation dividend of taxation: how citizens in Congo engage more with the state when it tries to tax them

Jonathan Weigel

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This article provides evidence from a fragile state that citizens demand more of a voice in the government when it tries to tax them. I examine a field experiment randomizing property tax collection across 356 neighborhoods of a large Congolese city. The tax campaign was the first time most citizens had been registered by the state or asked to pay formal taxes. It raised property tax compliance from 0.1% in control to 11.6% in treatment. It also increased political participation by about 5 percentage points (31%): citizens in taxed neighborhoods were more likely to attend town hall meetings hosted by the government or submit evaluations of its performance. To participate in these ways, the average citizen incurred costs equal to their daily household income, and treated citizens spent 43% more than control. Treated citizens also positively updated about the provincial government, perceiving more revenue, less leakage, and a greater responsibility to provide public goods. The results suggest that broadening the tax base has a “participation dividend,” a key idea in historical accounts of the emergence of inclusive governance in early modern Europe and a common justification for donor support of tax programs in weak states.

Keywords: OA; fund (search for similar items in EconPapers)
JEL-codes: D73 H20 P48 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2020-11-01
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Published in Quarterly Journal of Economics, 1, November, 2020, 135(4), pp. 1849 - 1903. ISSN: 0033-5533

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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:104561

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