Does Collecting Taxes Erode the Accountability of Informal Leaders? Evidence from the D.R.C

Delegating tax collection to informal leaders could raise revenue but runs the risk of undermining the local accountability of those leaders. We investigate this possibility by exploiting whether city chiefs in the Democratic Republic of the Congo were randomly assigned to collect property taxes in 2018. To measure accountability, we study the other side of the social contract: chiefs’ distribution of resources in a government cash transfer program in which they had discretion over the recipients of development aid. We find that, consistent with citizens’ preferences, chiefs who collected taxes allocated more program benefits to poorer households and thus made fewer inclusion and exclusion errors. They were no more or less likely to pocket benefits or allocate them to family. Across a range of measures, citizens appear to have up- dated positively about chiefs who collected taxes. We provide evidence that collector chiefs were more likely to target the poor because door-to-door tax collection created opportunities to learn which households were in greatest need. In contrast to concerns of ‘decentralized despotism,’ the paper thus finds evidence of accountability benefits from delegating tax responsibilities to local leaders in low-capacity states.