I like taxes, I really do. I’m a left-liberal after all. Tax and spend is like bread and butter to me.
Nevertheless, I don’t buy the idea that if people paid more taxes in developing countries they’d be more likely to meaningfully hold their governments to account. And that resource rents and aid, by virtue of being forms of government revenue which sit outside the tax cycle, contribute to worse governance (at least through this particular mechanism.) If you believe this then, as Matt suggests, a partial cure to the woes of poor governance in aid dependent or resource rich countries would be to start taxing people more. Either out of their income or from resource money or aid money which you’ve given directly to them as some form of unconditional cash transfer.
I understand the logic of all this; I just don’t buy it.
For a start, its advocates seem to assume away the potential problems of such approaches (i.e. the difficulties associated with setting up an honest, non-exploitative tax-gathering mechanism in countries where bureaucracies don’t work well in general).
But, above and beyond that, I think they’re misdiagnosing the problem of accountability in many developing countries. At least in those countries which I know a bit about, the issue is not that the population isn’t holding the state to account, but rather that they are holding it to account in very particular ways — primarily through clientelistic demands on politicians. In Western Melanesia the competition to get into parliament suggests that some people at least have a very good idea of the resources available to the state. It’s just that the complicated political ecology of this part of the world means that the only real strategy for liberating some of those resources is personalist and targeted from politicians to supporters. Which isn’t to say that there aren’t information issues involved, in a sense. If the voting public could be made aware of the benefits of well-run health systems (for example) and the potential to realise these benefits, politics might change dramatically (more on this in a second). But, this is quite a different issue from voters not knowing or caring about the resources available to their state.
Also, I’m not sure that this is how accountability really works in the developed world (individual citizens angry that their taxes are being wasted). Generally, I think that the main mechanism involved is collective action from groups of concerned citizens (who are a small subset of the population). Or to put it another way the goodish governance we see in most developed countries can be laid first and foremost at the feet of Civil Society Organisations.
All of which makes me think that the best means of fostering improved patterns of government accountability in developing countries are the un-sexy ones. Voter education. Changes to voting systems which undermine clientelism. Working with civil society…
To the extent that I think there is one easy obvious thing aid agencies could do it’s this: forget about making that next new aid transparency website. Rather, invest some time and money in publishing what you give to country X in fora (papers, TV, the radio, via CSOs) that people in country X actually use. No need for tax collectors, and you’ve just opened the black box of aid. Which probably would help.
(ps Matt, I hope this doesn’t seem too critical? It’s definitely not intended that way. Just continuing the debate).