Electricity provision and tax mobilization in Africa

Author
Moussa Blimpo, Justice Tei Mensah, K. Ochieng’ Opalo, Ruifan Shi
Content Type
Working Paper
Institution
Afrobarometer
Abstract
In this paper, we provide evidence on how the provision of social infrastructure such as reliable electricity can be leveraged to increase taxation in developing countries, particularly sub-Saharan Africa (SSA). First, using comprehensive data from the latest round of the Afrobarometer survey, we estimate, via the instrumental variable approach, the effect of access and reliability of electricity on tax compliance attitudes of citizens in 36 SSA countries. Evidence from the paper shows a significant positive effect of electrification on tax compliance attitudes with potentially strong externalities. Also, we find that reliability of supply is crucial in explaining the impact of electricity access on attitudes toward taxes. Second, we provide suggestive evidence on national identity as one channel driving this impact. Access to social amenities such as electricity induces a sense of national identity among citizens, thereby incentivizing them to contribute, through taxes, toward the functioning of the state.
Topic
Nationalism, Identities, Tax Systems, Electricity
Political Geography
Africa, Sub-Saharan Africa