The Taxman Cometh: A Virtuous Cycle of Compliance and State Legitimacy in the D.R. Congo

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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 exam- ines 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 indi- viduals to update positively about the legitimacy of the provincial government, indicating a positive feedback loop of state building and citizen tax compliance.