Formalizing Informal Taxation: Evidence from the DR Congo
This project examines whether formalizing an informal labor tax can reduce its regressive nature and improve citizens’ access to public services. For the informal tax, salongo, citizens contribute labor towards local public good projects such as road maintenance, bridge maintenance, trash collection, and countering erosion. We will partner with the Provincial Government of Kasai Central to evaluate a program to formalize salongo, in which citizens will use a biometric check in/check out system to log their contributions and receive monthly receipts cataloguing total contributions. We will examine the effects of this system, randomized on the neighborhood level, on (1) the incidence of the informal tax, (2) access to public goods and services, (3) payment of formal taxes, (4) local-level informal insurance and redistribution, and (5) the performance of the local bureaucrats in charge of organizing salongo. We cross-randomize citizen-side information interventions.