Technology and Local State Capacity: Evidence from Ghana

97 Pages Posted: 11 Apr 2022 Last revised: 16 Apr 2022

See all articles by James Dzansi

James Dzansi

University of Ghana

Anders Jensen

Harvard University - Harvard Kennedy School (HKS)

David Lagakos

University of California, San Diego (UCSD) - Department of Economics; National Bureau of Economic Research (NBER)

Henry Telli

University of Ghana

Multiple version iconThere are 2 versions of this paper

Date Written: April 2022

Abstract

This paper studies the role of technology in local-government tax collection capacity in the developing world. We first conduct a new census of all local governments in Ghana to document a strong association between technology use and property tax billing, collection and enforcement. We then randomize the use of a new revenue collection technology within one large municipal government. Revenue collectors using the new technology delivered 27 percent more bills and collected 103 percent more tax revenues than control collectors. Collectors using the new technology learned faster about which households in their assigned areas were willing and able to make payments. We reconcile these experimental findings in a simple Beckerian time-use model in which technology allows revenue collectors to better allocate their time towards households that are the most likely to comply with taxpaying duties. The model's predictions are consistent with experimental evidence showing that treatment collectors are more likely to target households with greater liquidity, income, awareness of taxpaying duties, and satisfaction with local public goods provision.

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Suggested Citation

Dzansi, James and Jensen, Anders and Lagakos, David and Telli, Henry, Technology and Local State Capacity: Evidence from Ghana (April 2022). NBER Working Paper No. w29923, Available at SSRN: https://ssrn.com/abstract=4080663

James Dzansi (Contact Author)

University of Ghana ( email )

PO Box 25
Legon, Accra LG
Ghana

Anders Jensen

Harvard University - Harvard Kennedy School (HKS) ( email )

79 John F. Kennedy Street
Cambridge, MA 02138
United States

David Lagakos

University of California, San Diego (UCSD) - Department of Economics ( email )

9500 Gilman Drive
La Jolla, CA 92093-0508
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Henry Telli

University of Ghana ( email )

PO Box 25
Legon, Accra LG
Ghana

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