Wilson Prichard, University of Toronto and International Centre for Tax and Development; Samuel Jibao, Centre for Economic Research and Capacity Building, Sierra Leone; and Nicolas Orgeira, International Centre for Tax and Development

1. Building Social Fiscal Contracts
Through Property Tax Reform in Sierra Leone
Wilson Prichard, University of Toronto and International Centre for Tax
and Development
Samuel Jibao, Centre for Economic Research and Capacity Building,
Sierra Leone
Nicolas Orgeira, International Centre for Tax and Development

2. Background
• There is mounting interest in strengthening property tax
systems
• However, the value of expanded taxation depends on
whether it results in broader public benefits: improved
public services, greater political knowledge and
engagement, stronger state capacity.
• Interest in property taxes reflects a belief in these broader
benefits: Property taxes are highly visible, easily linked to
services, and can create pressure on local governments to
improve (Jibao and Prichard 2015, Gadenne 2017, Martinez
2016).
• But do we see these improvements in practice?

3. Research Questions
• Two questions:
1. Does the tax reform initiative lead to
improvements in the quality of public services?
2. Do we see changes in taxpayers attitudes where
taxes are expanded? And, does this depend on
whether services improve or not?

4. Research Design
• We exploit a quasi-randomized experiment to evaluate the impacts
of a property tax reform program in Sierra Leone against a
comparable control group.
• Beginning in 2005 a property tax reform was implemented in City
Councils. In 2011 the model began to be expanded to more rural
District Councils.
• In 2012 four Councils adopted the reform program, following a
more or less identical and proven model. The locations of the
reform were largely random, reflecting capacity constraints and
availability of local donor funding.
• We compare these four “treatment districts” to 3 other “control
districts” that are otherwise similar, but did not implement reform.

5. Research Design
• We conducted two rounds of a panel survey: In 2012,
prior to implementation of the reform (2100
respondents), and in 2017, after four years of
implementation (1200 respondents successfully
tracked).
• The survey covered a detailed range of information
about tax payments, satisfaction with services,
attitudes toward taxation, trust in government, social
and political engagement
• We also gathered data about total tax collection, and
data from local authorities related to attitudes toward
expanded taxation, and inter-governmental
cooperation on tax matters.

6. Treatment and Control

7. Identifying Impacts
• At the macro level we look for evidence of improvements in service
provision, as measured by taxpayer perceptions of service satisfaction
• At the micro level we look for changes in attitudes and behavior that are
consistent with the idea that new taxes expand pressure for improved
service delivery
• We consider three types of outcomes that could generate pressures on
government for improved services:
 Increased political knowledge
 Reduced trust in government, and/or willingness to pay taxes (tax resistance)
 Increased political or community engagement
• Critically, we expect these effects primary when service do not improve:
 Where services improve we might see expanded political knowledge, but no
reduction in trust in government and no increase in political protests –
taxpayers are satisfied
 Where services do not improve we expect dissatisfied taxpayers who lose trust
in government and willingness to pay

8. Results
Quality of Services
Attitudes and Behaviors - Aggregate
Attitudes and Behaviors - Conditional
service_
satisfaction
Treatment assignment bv District
0.305**
0.103
Treatment assignment by individual
0.331**
0.126
mistrust_district mistrust_chiefdom Taxmorale political knowledge political_engagement
Treatment Assignment by District
Service Satisfaction Decreases
0.132
(0.117)
0.324**
(0.131)
-0.270*
(0.134)
0.655***
(0.130)
-0.129
(0.127)
Service Satisfaction Increases
0.026
(0.150)
0.053
(0.153)
0.021
(0.133)
-0.151
(0.082)
-0.201
(0.156)
Treatment Assignment by Individual
Service Satisfaction Decreases
0.204*
(0.097)
0.416**
(0.143)
0.255
(0.188)
0.667***
(0.163)
-0.042
(0.081)
Service Satisfaction Increases
-0.102
(0.188)
0.044
(0.161)
0.083
(0.188)
-0.167
(0.139)
-0.209
(0.123)
mistrust_district mistrust_chiefdom Taxmorale political knowledge political_engagement
Treatment Assignment by District
0.134
(0.118)
0.355**
(0.136)
-0.213*
(0.102)
0.554***
(0.135)
-0.221*
(0.103)
Treatment Assignment by Individual
0.142
(0.125)
0.460***
(0.140)
-0.193*
(0.100)
0.564***
(0.138)
-0.144
(0.101)

9. Results: Services
• Significant improvements in the quality of service
provision in areas that received the property tax
reform
• These improvements seem large relative to the
small amounts of revenue collected, suggesting
broader governance benefits of expanded
taxation
• These, and results to follow, appear robust to a
wide array of additional tests.

10. Results: Attitudes and Behaviors
Where services improve:
• Slightly expanded political knowledge,
 Interpretation: greater engagement with government
through taxation
• No significant change in willingness to pay taxes, or
trust in government
 Interpretation: Building significant new trust takes time,
but expanded taxation with no decline in trust is notable
success for government
• Possibly minor decline in political mobilization and
protest
 Interpretation: Citizens are relatively satisfied with
improvements in public services.

11. Results: Attitudes and Behaviors
Where services do not improve:
• Substantially expanded political knowledge
 Interpretation: Greater engagement with government
through taxation, large in magnitude due to dissatisfaction
• Significant decline in willingness to pay taxes, and trust
in local government
 Interpretation: Expanded collection without reciprocal
benefits undermines trust, and created pressure for
change
• No change in political mobilization and protest
 Interpretation: Compared to those who felt that services
improved, there is more political mobilization. The
absence of increased mobilization could reflect difficulty of
collective action, or intermediary role of Chiefs.

12. Concluding Thoughts
• Overall, consistent support for the existence of a tax-
governance link, where expanded taxation facilitates –
and creates pressure for – improved government
performance.
• Declining trust in government – and expanded
knowledge – where taxes are expanded, but services
are not improved, reflects “healthy skepticism” and
implicit pressure for improved performance.
• Taken together, these present a strong argument for
tax reform: It has led to improved outcomes and,
where outcomes have improved, has been good for
taxpayers and government alike.