Contrat social et mobilisation des ressources domestiques dans les pays en développement
Other titre : Social contract and domestic resource mobilization in developing countries
Kouamé, Wilfried Anicet Koua
Abstract: Taxation provides governments with the revenue needed to invest in development, reduce poverty and deliver public services. However, domestic resources in developing countries are scant and below the minimum level of 20 percent allowing to achieve development goals according to the United Nations Development Programme. Also, data from the World Bank Enterprise Surveys show that on average 22 percent of total sales are not reported for tax purpose in developing countries compared with only 7 percent in Organisation for Economic Co-operation and Development countries. The shortfall in domestic resources has important social and economic consequences as a low domestic revenues collection reduces the government ability to invest in development policies, deliver public services and reduce poverty. Although a large body of the literature has sought to understand factors explaining insufficient domestic revenue mobilization, little is known on how the interactions between the states and taxpayers (firms included) affect the tax attitudes of the latter. This dissertation identifies the relationship between the states and the taxpayers as a social contract whereby the signal sent by the states alters taxpayers' attitudes toward taxes. Three research questions forming each specific chapter are examined in the dissertation: (i) does trust in public institutions and the neighborhood affect taxpayers willing to pay their taxes? (ii) does the difference in distortionary infrastructures and policies explain the variation of tax evasion across countries?, and (iii) what are the roles of the demand and supply side of corruption on tax evasion in developing countries? The dissertation tackles the research questions mentioned above by combining both theoretical foundations and robust empirical evidence in each chapter. Moreover, a general equilibrium model with heterogeneous firms is developed to explain the variation of tax evasion across African and Latin American countries and understand the underlying mechanisms of tax behaviors. The findings highlight that developing countries can substantially increase domestic resource collection by reducing distortions in the business environment, improving the effectiveness of public policies and the implicit contract between governments and their citizens, as well as tackling public officials culture of demanding a bribe. Also, the findings indicate that policies seeking to increase domestic revenue mobilization from firms should work on public officials' culture of demanding a bribe and ensure market-based allocation of government contracts. In addition to providing specific contributions in each chapter, this dissertation as a whole contributes to the literature by using micro-foundations both at the taxpayers and firms levels, to show that the signal sent by the states affects tax attitudes.