Do government accountability and responsiveness enhance support for property taxes? Experimental evidence from China

Xiaobo Lü, Lily L. Tsai, Ping Zhang and Minh Trinh

World Development, 2025, vol. 194, issue C

Abstract: The adoption of property taxes is often met with significant challenges in developing countries. Enhancing administrative capacity for assessment and compliance is undoubtedly important, but addressing the political impasse caused by potential mass resentment poses a more formidable challenge. We explore whether institutions for responsiveness and accountability enhance tax morale in societies with weak democratic institutions. We investigate two dimensions of good governance that the government can uphold: government responsiveness to citizen demands in policymaking; and holding corrupt officials accountable. To assess their impact on property tax preferences and compliance behaviors in urban China, we conducted a conjoint experiment and a lab-in-the-field experiment. The former reveals that both responsiveness and accountability have positive effects on preferences for property tax policies; however, the results of the latter provide strong evidence that top-down institutions of accountability are more influential in shaping tax compliance behavior.

Keywords: Property tax; Governance; Experiment; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:194:y:2025:i:c:s0305750x25001366

DOI: 10.1016/j.worlddev.2025.107051

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