An excellent new study shows how reforming Governors of Lagos State, Nigeria constructed a new social contract around taxation

In fifteen years, Lagos has gone from being a symbol of disorder to a widely cited example of effective African governance. The Lagos State government has succeeded in multiplying its tax revenues and using these resources to restore basic infrastructure and expand public services and law enforcement.  

Drawing on extensive field research, this paper explores how the combination of electoral pressure and elite ambitions to create an orderly and prosperous megacity motivated governance reforms. Steady progress on tax collection was achieved through a combination of increased bureaucratic resources, managerial reforms, public outreach, and cooperation with organized social groups.

The Lagos government successfully increased taxpayer compliance by promoting the idea of a social contract between taxpaying citizens and a state providing infrastructure and services. Lagos’s expansion of the tax net was also critically enabled by strong political relationships between state government leaders and informal sector organizations, especially the Lagos market trader’s association.  

The study was conducted by Diane de Gramont, a nonresident research analyst in Carnegie’s Democracy and Rule of Law Programme.
Read the full article here