Working Paper: CEPR ID: DP15138
Authors: Pablo Balan; Augustin Bergeron; Gabriel Tourek; Jonathan Weigel
Abstract: Historical states with low capacity often delegated tax collection to local elites, despite the risk of mismanagement. Could this strategy raise revenues without undermining government legitimacy in fragile states today? We provide evidence from a randomized policy experiment assigning neighborhoods of a Congolese city — spanning 45,162 properties — to tax collection by state agents or by city chiefs. Chief collection raised property tax compliance by 3.3 percentage points, increasing revenues by 43%. Although chiefs collected more bribes, we find no evidence of mismanagement or backlash on other margins. Results from a hybrid treatment arm in which state agents consulted with chiefs before collection suggest that chief collectors achieved higher compliance by using local information to more efficiently target households with high payment propensities, rather than by being more effective at persuading households to pay conditional on having visited them.
Keywords: No keywords provided
JEL Codes: H20; P48; D73
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| local chief tax collection (H26) | tax compliance (H26) |
| local chief tax collection (H26) | property tax revenues (H71) |
| hybrid treatment arm (state agents consulting with chiefs) (C90) | tax compliance (H26) |
| chief collectors (H26) | accurate assessment of property liabilities (G32) |
| chief collectors (H26) | trust in government (H10) |