ICTD Working Paper 11

This is a joint paper by the International Centre for Tax and Development (ICTD) and the Secure Livelihoods Research Consortium (SLRC)

Despite growing interest in the connections between taxation, development and governance, surprisingly little attention has been paid to the relationship between taxation and people’s livelihoods, particularly in places affected by war and violent conflict. Yet, it is in these landscapes that people encounter particularly fierce challenges to livelihood recovery, often finding themselves operating in a political economy environment that is at once complex and shifting, as well as brutal and exploitative. And it is also in these contexts that questions around public goods provision and state-society relations carry most weight – places affected badly by conflict tend to have urgent service-related needs, and violent conflicts can erode trust in governance actors.

Through a selective review of key literature, we argue in this paper that if we are truly interested in the relationships between taxation and livelihoods, then an exclusive focus on formal taxation is inadequate. Subsequently, we suggest widening our analytical lens to include what might be referred to as ‘informal tax’ – that is, payments and costs (for example, in relation to labour time) which are incurred outside formal statutory arrangements, the benefits of which may be accrued by a variety of state, non-state and community actors or institutions. In reality, the lines between formal and informal taxation are likely to be blurred. Nevertheless, a broad analytical focus on taxation, which captures both its formal and informal dimensions, may be defined as: all payments – whether cash or in kind, including labour time – that are made as a result of the exercise of political power, social sanction or armed force (as opposed to market exchange). Further research is needed to explore these issues, and this working paper can be considered the first step of an ongoing joint research project by the International Centre for Tax and Development (ICTD) and Secure Livelihoods Research Consortium (SLRC) to address this need.

You can download the working paper below, or download the SLRC’s Evidence Brief: Taxation and livelihoods – A review of the evidence from fragile and conflict affected rural areas (438.418kb). This evidence brief provides an overview of the evidence base when exploring the relationship between taxation and livelihoods in conflict affected situations. It discusses the geographical, methodological and thematic nature of the evidence base, summarises key findings, clarifies what the research means for policy-makers, and provides links to relevant empirical material.


Oliver Lough

Richard Mallett

Paul Harvey

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Read the 2-page brief