Inequality in Public Good Provision and Attitude Towards Taxation: Sub-national Evidence from Africa

Lisa Chauvet, Siyavash Eslami, Marin Ferry and Laure Pasquier-Doumer

Working Paper from Agence française de développement

Abstract: This paper investigates the relationship between inequality in public good provision and attitude towards taxation in the context of sub-Saharan African countries. Individuals’ attitude towards taxation is measured using the sixth round of the Afrobarometer geo-coded data, and inequality is measured with a Gini index computed using data on night light intensity around individuals. Our identification strategy relies on an IV estimation where the instrument is a Gini index computed on predicted pixels’ light intensity based on the initial distance of each pixel from its closest enlightened pixel. Results suggest that inequality is positively associated with more pro-tax attitude. However, this association depends on the size of the area over which Gini indexes are computed: inequality in the immediate surrounding of individuals (in 20 up to 50km buffer areas) has a positive effect on their attitude towards taxation that we interpret as a higher demand for redistribution in more unequal context. In line with this interpretation, we also find that when facing high inequality, individuals in the bottom of wealth distribution or far away from economic centers have a more favorable attitude towards taxation.

Keywords: Afrique (search for similar items in EconPapers)
JEL-codes: Q (search for similar items in EconPapers)
Pages: 45
Date: 2020-11-27
New Economics Papers: this item is included in nep-afr, nep-dev, nep-pbe and nep-pub
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Persistent link: https://EconPapers.repec.org/RePEc:avg:wpaper:en11845

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