State Capacity and Tax Compliance in Liberia

Abstract:

In a context with low legal enforcement, what factors can promote entry into the tax base? While the Allingham-Sandmo model and the growing literature on third party reporting emphasize the importance of detection capacity, less attention has been paid to the ability of the state to enforce the tax laws and collect payment after detection. This project uses a randomized field experiment with property owners in Liberia to understand how individuals respond to increases in state capacity along these two dimensions.

Last updated on 10/29/2015