The Participation Dividend Of Taxation: How Citizens In Congo Engage More With The State When It Tries To Tax Them
This paper provides evidence from a fragile state that citizens demand more of a voice in the government when it tries to tax them. I examine a field experiment randomizing property tax collection across 431 neighborhoods of a large Congolese city. The tax campaign was the first time most citizens had been registered by the state or asked to pay formal taxes. It raised property tax compliance from 0.1% in control to 10.4% in treatment. It also increased political participation by nearly 5 percentage points (26%): citizens in taxed neighborhoods were more likely to attend townhall meetings hosted by the government or to submit evaluations of its performance. To participate in these ways, the average citizen incurred costs greater than their daily household income, and treated citizens spent 40% more than control. The results suggest that broadening the tax base has a ‘participation dividend,’ a key idea in historical accounts of the emergence of inclusive governance in early modern Europe and a common justification for donor support of tax programs in weak and fragile states.