The taxman cometh: A virtuous cycle of compliance and state legitimacy in the D.R. Congo
How do states in a low-tax, low-capacity equilibrium spur citizens to start paying taxes? Public-finance models hinge on citizen perceptions of enforcement, while political scientists emphasize the legitimacy of the state in generating voluntary compliance. This paper examines the determinants of payment in the first-ever citizen property tax campaign in a large Congolese city that raised average compliance from 0% to 10%. Aside from ability to pay, prior beliefs about the legitimacy of the provincial government are the strongest predictor of tax payment. Legitimacy is itself influenced by tax collectors’ identities: tax compliance is higher when collectors work in the areas in which they live; minority ethnic citizens are more likely to pay to minority ethnic collectors. Further, on average the tax campaign leads individuals to update positively about the legitimacy of the provincial government, indicating a positive feedback loop of state building and citizen tax compliance.