Merima Ali will present the paper “Tax compliance, culture and local institutions: The legacy of pre-colonial centralization in Uganda”.

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Abstract: The paper examines the legacy of pre-colonial centralization on tax compliance norms of citizens in contemporary Uganda. By combining geo-referenced anthropological data on pre-colonial ethnic homelands with micro survey data from several rounds of the Afrobarometer Survey, pre-colonial centralization is found to be associated with a higher willingness to pay taxes. The results hold for the whole sample and in the regression discontinuity analysis on individuals that reside close to the borders of neighboring ethnic homelands with different levels of pre-colonial centralization.

The higher tax compliance norm in pre-colonial centralized homelands seems to be due to the persistent culture to obey authority and not necessarily through the legacy of better-quality local institutions. We find that while respondents in pre-colonial centralized homelands command a significantly lower level of trust towards local leaders, they, on the other hand, have a stronger belief that they should obey rules coming from different authorities such as the tax authority, the court, and the government in power.

The Tax for Development Webinar Series is jointly organised by CMI and the TaxCapDev-network and features ongoing research and initiatives to strengthen domestic revenue mobilization in developing countries, with a focus on sub-Saharan Africa. You can read more about the webinar series and sign up for the individual webinars HERE.