That taxes bring development is the dream and not necessarily the reality

Foto: Abby flat-coat/Flickr

Research Project

Strengthening Fragile States through Taxation

How is the political authority to tax established, exercised and maintained over time? State-building requires predictable income. Without a domestic revenue base, even core activities states are expected to perform – such as protecting territory, providing justice, and delivering basic services – becomes difficult.

Themes

International donors have responded to this challenge by transferring resources and disbursing aid, but in the most fragile states this has not led to more effective state institutions. The reason, we assume, is that the establishment of a functional tax regime is not only a technical administrative issue, but very much also a political one.

In a comparative case study of three countries – Liberia, Mali, and Tanzania – this project will investigate how the political authority to tax is established, exercised, and maintained. This will help us understand what separates weak states that succeed from those that fail in setting up fiscal functions. One crucial variable is opposition and contestation from different actors, and therefore, the project will investigate the circumstances under which other actors undermine, distort, or explicitly challenge the tax administration of the state.

The research objective addresses the most pertinent development challenge of this age, as more than 80 % of the world’s poor are predicted to be living in fragile states by 2030. These states have difficulty carrying out even the most basic governance functions. Consequently, their ability to confront some of the largest challenges to human security – such as global pandemics or climate change – is extremely limited. Fragile states have little capacity to react adequately on their own as their fiscal capacity is very low.

FRAGTAX will produce and communicate knowledge crucial for national, regional, and international attempts at improving revenue collection and provision of public services; providing a path to sustainable state-building and development; and achieving the UN 2030 Sustainable Development Goals. The project will push forward the research agenda on taxation and state-building in fragile states. Fieldwork will be carried out in Liberia, Mali, and Tanzania.

The core team of FRAGTAX is Research Professor Morten Bøås (Project Leader, NUPI), Senior Research Fellow Kari Osland (NUPI), Senior Research Fellow Alessio Iocchi (NUPI), Research Professor Odd-Helge Fjeldstad (CMI), Senior Researcher Abdoul Wakhab Cissé (ARGA-Mali), Professor Prosper Ngowi (Mzumbe University), Director James S. Shilue (P4DP - Liberia).