Tax and Governance

There is mounting evidence that increased taxation can spur statebuilding and increase government accountability.  This possibility is critical: without strong links between taxation, statebuilding and accountability, expanded taxation may fail to deliver improved outcomes for taxpayers.  However, such links are far from guaranteed, and depend, among other things, on the types of taxes raised, the nature and equity of tax enforcement, the extent of transparency, the existence of forums for popular engagement and the role of civil society in supporting popular demand making.  The current phase of our research on this theme focuses on identifying concrete strategies for strengthening the links between taxation and good governance at both the local and national levels.

Publications:

October 2019
What are ‘Tax Expenditures’ and How Big are Energy-Related Tax Expenditures?
by Roel Dom & Neil McCulloch

Tax expenditures occur when a government provides a reduction in a tax obligation such that it collects less tax than it would have otherwise collected. Tax expenditures are an integral, though controversial, part of all contemporary tax systems. This policy briefing first summarises the various ways in which tax expenditures can be defined and measured….

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Nigeria: No longer an oil state?
by Sarah Burns & Olly Owen

While there is much speculation about Nigeria’s probably post-oil future, it is in fact already a present reality: In 2015, for the first time since 1971, Nigeria’s public finances had already earned more from non-oil sources than from oil revenues. The transformation to a post-oil future is already in the past.

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June 2019
Democratisation in Tanzania: No Elections Without Tax Exemptions
by Ole Therkildsen & Ane Karoline Bak

A demand-supply framework has been developed and applied to Tanzania to explore the link between democratisation, economic liberalisation and the use of tax exemptions to fund political parties’ electoral campaigns. In Tanzania, the demand for this type of money has increased since one-party rule was abolished in 1992. This led to reduced state subsidies to…

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April 2019
Colonial Legacy, State-building and the Salience of Ethnicity in Sub-Saharan Africa
by Merima Ali, Odd-Helge Fjeldstad, Boqian Jiang & Abdulaziz B Shifa

African colonial history suggests that British colonial rule may have undermined state centralisation due to legacies of ethnic segregation and stronger executive constraints. Using micro-data from anglophone and francophone countries in sub-Saharan Africa, we find that anglophone citizens are less likely to identify themselves in national terms (relative to ethnic terms). To address endogeneity concerns,…

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December 2018
Taxing Government: The Case of the Uganda Revenue Authority’s Public Sector Office
by Henry Saka, Ronald Waiswa & Jalia Kangave

This ICTD Research in Brief is a two-page summary of ICTD Working paper 84 by Henry Saka, Ronald Waiswa and Jalia Kangave. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. In the past three decades, revenue authorities in African countries…

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November 2018
China’s Challenge to International Tax Rules and the Implications for Global Economic Governance
by Martin Hearson & Wilson Prichard

Twentieth century institutions of global economic governance face a profound challenge adapting to the rise of emerging markets and, especially, China’s rise. This is especially the case for the international tax regime, whose institutional home is the OECD and which is based on norms that favour capital exporting states. To understand the nature of the…

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September 2018
Does Fiscal Decentralization Enhance Citizens’ Access to Public Services and Reduce Poverty? Evidence from Côte d’Ivoire Municipalities in a Conflict Setting
by Tiangboho Sanogo

Fiscal decentralization has been implemented in many countries with an explicit objective of improving public service delivery and reduce poverty. However, its effectiveness in achieving these goals are much debated and the empirical literature has mostly focused on poverty reduction using cross-country analysis. This paper analyses whether, and how, the devolution of revenue raising responsibilities…

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What Explains the Recent Calls for Reinstatement of a Tax Considered Unpopular? An Analysis of Graduated Tax in Uganda
by David.J Bakibinga, Jalia Kangave & Dan Ngabirano

This ICTD Research in Brief is a two-page summary of ICTD Working Paper 79 by David J Bakibinga, Julia Kangave and Dan Ngabirano. This series is aimed at policy makers, tax administrators, fellow researchers and anyone else who is big on interest and short on time. Graduated tax became unpopular for a variety of reasons….

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June 2018
Tax Reform for Low Income Countries: Five Ideas for Simplifying Tax Systems to Fit Local Realities
by Wilson Prichard & Mick Moore

There is no silver bullet to strengthen the tax systems of low-income countries. Dramatic changes in tax systems and tax collection are rare. Successful improvements more often involve a great deal of hard and steady work, and the gradual construction of popular trust and (grudging) support for reform. There remains, however, space for ‘organising ideas’…

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June 2018
Chapter 13: Taxation and Development
by Mick Moore

In The Oxford Handbook of the Politics of Development, two of America’s leading political scientists on the issue, Carol Lancaster and Nicolas van de Walle, have assembled an international cast of leading scholars to craft a broad, state-of-the-art work on this vitally important topic. Chapter 13, written by Mick Moore, explores the impact of taxation on politics…

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Blogs:

November 2019
by Wilson Prichard

At the request of the ICTD, Professor Richard Bird generously agreed to review the new World Bank publication Innovations in Tax Compliance, which proposes a new framework to help guide the design of tax reform efforts. Richard was the founding Chair of the Advisory Group of the ICTD, and is a long term advisor to…

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November 2019
by Richard Bird

See here for a response to Professor Bird’s critique by the World Bank framework’s lead author and ICTD Research Director Wilson Prichard. Innovations in Tax Compliance, a recent World Bank working paper, undertakes two tasks. First, it reviews the rapidly growing theoretical and especially empirical literature on how countries can improve tax compliance and, not…

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August 2019
by Uzochukwu Uchechukwu Alutu

Nigeria’s dependence on oil Nigeria relies more on oil than it does on direct taxes or any other forms of revenue to run its economy. Since discovering oil in 1956, Nigeria has become heavily reliant on oil revenue for survival – in the boom period preceding the 2014 oil price plummet (2010 – 2013), the…

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Research Projects:

Current Project
The impact of intergovernmental transfers on fiscal behaviors of local governments in Ethiopia
Project Researchers: Dejene Mamo Bekana

This inquiry aims to examine the effect of intergovernmental fiscal transfers on fiscal behaviours of local governments in Ethiopia for the period 1992–2018. The empirical analysis shall follow the systems general methods of moments regression technique. The motivation for using this estimation technique is to provide special focus to the issue of endogeneity by estimating…

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Current Project
Tax Collection and Bureaucrat Accountability: Experimental Evidence from the DRC
Project Researchers: Laura Paler, Augustin Bergeron, Gabriel Tourek & Jonathan L Wiegel

Taxation is thought to stimulate participation and accountable governance. This project examines how tax collection affects local bureaucrat performance in the DRC. We exploit random variation in whether local bureaucrats known as avenue chiefs were responsible for property tax collection (treatment), or whether agents of the tax ministry collected taxes within chief jurisdictions instead (control)….

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Current Project
Mining Taxation – Fondation pour les Etudes et Recherches sur le Développement International (FERDI)
Project Researchers: Celine De Quatrebarbes, FERDI

The Ferdi will update the legal and tax database country by country. It estimates that the average time needed to update a country is four days. However, it goes without saying that countries that have made major tax reforms will require more time than countries whose laws have not changed. For example, Burkina Faso, which…

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Current Project
Energy-related Tax Expenditures in Africa
Project Researchers: Dr. Neil McCulloch & Dr. Roel Dom

This project will explore the scope and size of energy-related tax expenditures in Africa. Tax expenditures (including rate reductions, exemptions and other forms of foregone revenue) can significantly reduce the overall revenue received by African governments. The literature on energy subsidies suggests that energy-related tax expenditures are often among the largest forms of revenue loss….

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