Building State Capacity for Tax Collection: Emerging Evidence and Implications for Practice
In the Democratic Republic of Congo, tax revenues are equivalent to just 7.5% of GDP. This stands in stark contrast to higher-income countries, in which tax revenues represent an average of 34% of GDP and generate billions of dollars for essential government services like infrastructure, education, health care, policing, and social safety nets.
The challenges of domestic resource mobilization are shared by many low-income countries. These challenges are complex and involve factors related to state capacity for tax collection and delivery of public services, the prevalence of informal economies, and firms’ and citizens’ knowledge and beliefs about paying taxes.
The fourth webinar in the Governance, Crime, and Conflict Initiative’s (GCCI) series will discuss randomized evaluations funded by GCCI and others that address these questions and their implications for policymakers.
Panelists will share emerging insights from randomized evaluations on tax policy and administration in the Democratic Republic of Congo, where researchers have worked with the provincial government of Kasaï Central to address questions of optimal tax policies. They will also discuss the implications of this new research for evidence-informed decision-making.
Hosted by J-PAL’s Crime and Violence Initiative, J-PAL’s Governance Initiative, and Innovations for Poverty Action’s (IPA) Peace & Recovery Program, this webinar series showcases emerging evidence and policy lessons from the first three years of GCCI. J-PAL and IPA, with support from the UK’s Foreign, Commonwealth & Development Office, jointly launched GCCI with the aim of increasing our understanding of effective policies to promote peace and good governance, reduce crime, and support individuals and communities recovering from conflict.
Dina Pomeranz is an assistant professor of applied economics at the University of Zurich and a J-PAL affiliate. She will provide an overview of the literature on taxation in low-capacity settings, framing the contribution of the studies.
Augustin Bergeron is a PhD candidate in political economy and government at Harvard University. He will discuss the results of the GCCI-funded randomized evaluation, The State Capacity Ceiling on Tax Rates: Evidence from Randomized Tax Abatements in the DRC.
Gabriel Tourek is a postdoctoral associate at the Massachusetts Institute of Technology and J-PAL Global. He will share evidence from the randomized evaluation, Local Elites as State Capacity: How City Chiefs Use Local Information to Increase Tax Compliance in the D.R. Congo.
Jonathan Weigel is an assistant professor in the Department of International Development at the London School of Economics and Political Science. He will present findings from the randomized evaluation, The Participation Dividend of Taxation: How Citizens in Congo Engage More with the State When it Tries to Tax Them.
Marina Mavungu Ngoma
Marina Mavungu Ngoma is a PhD Candidate in economics and public policy at Tufts University, with a focus on structural transformation, firms and misallocation. She previously worked on issues of agricultural and rural development for the Office of the Prime Minister in the Democratic Republic of Congo. She will speak to how these results can be interpreted and applied in practice.
David Alzate, Moderator
David Alzate is a senior policy associate in the Political Economy and Governance sector at J-PAL and the manager of the Governance Initiative.