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American Economic Review Vol. 112 No. 3 2022

Local Elites as State Capacity: How City Chiefs Use Local Information to Increase Tax Compliance in the Democratic Republic of the Congo

Pablo Balán1; Augustin Bergeron2; Gabriel Tourek3; Jonathan L. Weigel4

1 School of Political Science, Government, and International Affairs, Tel Aviv University (email: ) · 2 King Center on Global Development, Stanford University (email: ) · 3 Department of Economics, University of Pittsburgh (email: ) · 4 Haas School of Business, University of California Berkeley and CEPR (email: )

open access

Abstract

This paper investigates the trade-offs between local elites and state agents as tax collectors in low-capacity states. We study a randomized policy experiment assigning neighborhoods of a large Congolese city to property tax collection by city chiefs or state agents. Chief collection raised tax compliance by 3.2 percentage points, increasing revenue by 44 percent. Chiefs collected more bribes but did not undermine tax morale or trust in government. 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.

DOI
10.1257/aer.20201159
Volume
112
Issue
3
Pages
762-797
Language
en
Sources
bibtex:phds-export.bib openalex crossref

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