Marketing Taxation? Experimental Evidence on Enforcement and Bargaining in Malawian Markets

American Political Science Review · 2025-07-18 · 4 citations

Understanding how to increase government revenue via taxation is a core puzzle in state development. Taxation is critical for states to fund public goods, and may have positive spillover effects on citizen-state relations. We argue that tax compliance will be higher when governments employ community-level, rather than individual-level, interventions. To test whether it is more effective to focus such interventions on top-down (TD) enforcement or bottom-up (BU) quasi-voluntary compliance, we ran a multi-arm field experiment in 128 markets in Malawi. We find that the BU intervention significantly increased tax compliance by 40%. The TD intervention had a less robust effect on compliance, although not significantly different from that in the BU group. The BU intervention, but not the TD, also increased trust in government, satisfaction with services, and political engagement. The results show that community-level tax interventions can increase compliance and that quasi-voluntary approaches can positively reshape citizen-state relations.

Moving toward the Median: Compulsory Voting and Political Polarization

American Political Science Review · 2024-02-01 · 10 citations

Should turning out to vote in mass elections be voluntary or compulsory? Previous normative arguments for compulsory voting often rely on contested normative claims about the moral duty to vote or about the democratic legitimacy conveyed by high turnout. Our article strengthens the normative case for compulsory voting by arguing that it could improve democracy by reducing polarization, which existing work suggests can lead to democratic backsliding. Drawing on spatial models of electoral competition, we argue that, by reducing more extreme voters’ ability to threaten to abstain due to alienation, the introduction of compulsory voting can push party platforms toward the median voter’s preferences. This directly decreases party polarization, defined as the distance between party platforms. We examine potential normative and empirical objections to this argument and provide scope conditions under which compulsory voting is likely to decrease polarization.

A Model of Taxation and Accountability

2023-04-20

Abstract Chapter 4 develops a theory of how and why governments will choose to tax when doing so increases the demands they face from citizens. It develops a formal model of taxation in which a rent-seeking government decides between not taxing, taxing coercively, and seeking a tax bargain. The first version of the model is an autocracy where citizens cannot remove the leader. The chapter then introduces elections to show how the model changes when citizens can vote a leader out of office. While taxation can lead to higher accountability, there are conditions under which governments prefer to extract rents even at the cost of losing office. Critically, while democracy can make taxation more sustainable under certain conditions, it can also have a negative effect on both coercive taxation and tax bargaining, leading to lower taxation overall.

Replication Data for: Moving towards the Median: Compulsory Voting and Political Polarization

Harvard Dataverse · 2023-10-04

R script to replicate results found in Table 1 of paper.

Understanding Fiscal Capacity

2023-04-20

Abstract Chapter 2 provides an overview of previous research on taxation, state capacity, and accountability and argues the need for a new theory. Existing literature is primarily based on the experience of European state development, in which the threat of war drove state development. African countries had a similar trajectory before colonization, but at the time of independence in the twentieth century faced very different dynamics. First, the threat of international war was much lower. Second, governments had access to more revenue sources, including foreign aid and natural resources. Third, democracy in many African countries preceded both economic development and building state capacity. Combined, these differences highlight the need to revise our understanding of the relationship between taxation, state-building, and democracy.

How Taxation Increases Accountability Demands

2023-04-20

Abstract Chapter 3 introduces a new theory to explain why and how taxation increases the accountability pressures governments face. It argues that citizens expect to receive their earned income, and that taxation induces a sense of loss. Theories of loss aversion imply that, when individuals are below their reference point, their utility functions are more sensitive to changes. We should therefore expect that citizens care more about the level of public goods provided, and will be more upset if government misspends tax dollars. If citizens’ willingness to engage in political actions like voting or protesting is linked to this perception of losses and the negative emotions they can cause, then taxed citizens should be more likely than untaxed citizens to demand better performance from leaders, and to take action when dissatisfied. The chapter appendix presents the formal model on which the chapter is based.

Taxation, Democracy, and Accountability

2023-04-20

Abstract Chapter 6 tests when governments will choose to tax, and when doing so is likely to lead to better governance and lower corruption. It uses cross-national panel data to show that democracy is only strongly associated with higher taxation in higher-income countries. In low-income countries, the effect is null or negative. Democratization is associated with significant decreases in tax-to-GDP ratios in following years. Data from Afrobarometer suggest that tax net is smaller in African democracies. Cross-national panel data shows that taxation is associated with lower corruption. As predicted, taxation has a more pronounced effect on corruption for democracies in which citizens’ demands can translate into policy more easily. Finally, I show that direct taxes have a stronger relationship with corruption than indirect taxes, following the results in Chapter 5.

Do Indirect Taxes Bite? How Hiding Taxes Erases Accountability Demands from Citizens

The Journal of Politics · 2023-03-14 · 28 citations

Taxation is fundamental to citizen-government relations. Seminal accounts attribute democratization to direct taxation’s rise, and recent evidence shows that direct taxes increase citizens’ accountability demands. However, today many governments rely heavily on indirect taxes; evidence is mixed on whether they have similar effects. We present cross-national data demonstrating that indirect taxes are associated with lower levels of government accountability than direct taxes. We argue that the visibility of taxes affects their accountability consequences. We further posit that, on average, indirect taxes become less visible than direct once citizens have acclimated to higher prices. We combine lab-in-the-field experiments with survey experiments in a developing country to demonstrate that less visible taxes provoke less willingness to punish leaders politically and that established indirect taxes are not highly visible to citizens. The findings suggest that the growing reliance on indirect taxes may limit taxation’s accountability dividends and impair democratic representation.

Introduction

2023-04-20

Abstract Chapter 1 provides an introduction to the book. While African economies are developing rapidly, government fiscal capacity, particularly taxation, has not kept pace. To continue to develop, governments need more revenue to fund infrastructure and public goods. Existing theories do not explain why governments fail to tax more. This chapter introduces the argument of the book. Taxation makes citizens more politically engaged, and increases the demands they make of government. Governments’ willingness to tax will depend on the extent to which they can satisfy citizens’ demands while maintaining rent extraction. When taxation increases the demands leaders face from citizens, rent-seeking leaders of low-capacity states will strategically underinvest in fiscal capacity in order to minimize citizens’ demands. The chapter then outlines the structure of the book and discusses implications.

Conclusion

2023-04-20

Abstract Chapter 8 concludes the book. It summarizes the findings of the book, and then discusses implications, scope conditions, and suggestions for future research. I argue that any attempts to increase taxation in developing countries must consider the political issues taxation raises: low fiscal capacity may be the result of political resistance rather than capacity issues. The book’s findings apply to a wide range of tax types and governments, although the exact outcomes will depend on local conditions. More work is needed to understand how taxation affects collective action and how best to support fiscal capacity in developing countries.