As part of Columbia University's Spring 2024 Development Workshop, Jonathan Weigel will present "Does Collecting Taxes Erode the Accountability of Informal Leaders? Evidence from the D.R.C." at the Development Seminar.
Delegating tax collection to informal leaders could raise tax revenue but runs the risk of un- dermining the local accountability of those leaders. We investigate this tradeoff by exploiting whether city chiefs in the Democratic Republic of the Congo were randomly assigned to col- lect property taxes in 2018. To measure accountability, we study the other side of the social contract: chiefs’ distribution of resources in a government cash transfer program in which they had discretion over the recipients of development aid. In line with citizens’ preferences, chiefs who collected taxes allocated more program benefits to poorer households and thus made fewer inclusion and exclusion errors. They were no more or less likely to pocket benefits or allocate them to family. Across a range of measures, citizens appear to have updated positively about chiefs who collected taxes. We provide evidence that collector chiefs allocated aid to poorer households because door-to-door tax collection created opportunities to learn which house- holds were in greatest need. In contrast to concerns of ‘decentralized despotism,’ we thus find evidence of accountability benefits from delegating tax responsibilities to local leaders in low-capacity states.