New Evidence that Citizen Engagement Increases Tax Revenues

pic by Tax Credits on flickr

Quite a while ago, drawing mainly from the literature on tax morale, I posted about the evidence on the relationship between citizen engagement and tax revenues, in which participatory processes lead to increased tax compliance (as a side note, I’m still surprised how those working with citizen engagement are unaware of this evidence).

Until very recently this evidence was based on observational studies, both qualitative and quantitative. Now we have – to my knowledge – the first experimental evidence that links citizen participation and tax compliance. A new working paper published by Diether Beuermann and Maria Amelina present the results of a randomized experiment in Russia, described in the abstract below:

This paper provides the first experimental evaluation of the participatory budgeting model showing that it increased public participation in the process of public decision making, increased local tax revenues collection, channeled larger fractions of public budgets to services stated as top priorities by citizens, and increased satisfaction levels with public services. These effects, however, were found only when the model was implemented in already-mature administratively and politically decentralized local governments. The findings highlight the importance of initial conditions with respect to the decentralization context for the success of participatory governance.

In my opinion, this paper is important for a number of reasons, some of which are worth highlighting here. First, it adds substantive support to the evidence on the positive relationship between citizen engagement and tax revenues. Second, in contrast to studies suggesting that participatory innovations are most likely to work when they are “organic”, or “bottom-up”, this paper shows how external actors can induce the implementation of successful participatory experiences. Third, I could not help but notice that two commonplace explanations for the success of citizen engagement initiatives, “strong civil society” and “political will”, do not feature in the study as prominent success factors.  Last, but not least, the paper draws attention to how institutional settings matter (i.e. decentralization). Here, the jack-of-all-trades (yet not very useful) “context matters”, could easily be replaced by “institutions matter”.

You can read the full paper here [PDF].

12 thoughts on “New Evidence that Citizen Engagement Increases Tax Revenues

  1. Pingback: New Evidence Shows Citizen Engagement Increases Tax Revenues | Asset Stewardship

  2. Tiago — as per usual, you found academic information that people like me would probably never find otherwise and introduced it to us here with beautiful clarity. I really appreciate how you make that translation, as it were, happen.

    Hate to leave this in a comment, but I’m writing a book about online public engagement for Routledge and trying to put together an informal group to advise/correct me. Would be greatly honored to have your brains on the team. But can’t scare up an email for you and it’s a little long for a tweet. I’d be glad to send you a better explanation; ping me on any of my wordpress blogs or della [dot]rucker [at] wiseeconomy [dot] com. Many thanks.

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