Paying Taxes to a Weak State: Quasi-Voluntary Compliance in Congo
Jonathan L. Weigel. In Preparation.
Why do people obey the law in settings of weak state capacity? Public-finance models emphasize the expected costs and benefits of compliance or evasion. Other work points to voluntary motives. Although compliance with taxation and other laws is a key facet of state building, the topic has escaped scrutiny with modern empirical methods. I estimate the determinants of tax compliance in a door-to-door property tax campaign in Congo. Individuals who anticipate a higher probability of punishment for evasion are indeed more likely to pay the tax. However, this effect is dwarfed by voluntary motives: individuals who view the state more favorably are more likely to pay. Moreover, on average the program leads individuals to update positively about the legitimacy of the provincial government. These findings suggest a virtuous cycle in state building and citizen compliance.