Event

Abstract: The paper examines how working as a tax collector for the formal state affects the local accountability of informal elites (city chiefs) in D.R. Congo. The study exploits random variation in whether city chiefs were responsible for property tax collection (treatment), or whether agents of the tax ministry collected taxes within avenue chiefs’ jurisdictions instead (control). The study examines the accountability of chiefs by measuring how they choose to allocate scarce benefits from a government anti-poverty program in their community.

The study finds that chiefs who collected taxes are more likely to target the poor and make fewer errors of inclusion in distributing program benefits. There are no changes in corruption or nepotism. The authors’ exploit two cross-randomized citizen-side treatments as well as variation in whether chiefs’ taxed in all or only part of their jurisdictions to shed light on the mechanism. Collecting taxes appears to increase chiefs’ sense of duty and public spiritedness, while also equipping chiefs with better information about households’ need that enables them to make fewer inclusion errors. Rather than leading to cooptation and `decentralized despotism,’ the results suggest that delegating formal tax collection responsibilities to informal elites can in fact strengthen their accountability to their local constituents.

Register for the webinar HERE.

The Tax for Development Webinar Series is jointly organized by CMI and the TaxCapDev-network and features ongoing research and initiatives to strengthen domestic revenue mobilization in developing countries, with a focus on sub-Saharan Africa. You can read more about the webinar series and sign up for the individual webinars HERE.