Compliance, accountability, and the social contract: Studying the impacts of property tax reform in Sierra Leone

Since the 1980s, growing interest in the potential benefits of decentralisation in the developing world reflect the potential to increase the efficiency and accountability of government operations. Yet, while there has been much attention to the potential benefits of decentralisation, results in practice have been much more mixed. A largely overlooked explanation is that the decentralization of expenditure responsibilities has not been accompanied by decentralization of revenue raising responsibilities and capacity. Local revenue collection will be an important driver of the efficiency and accountability gains predicted by proponents of decentralisation by giving local governments greater autonomy and encouraging engagement and ownership by citizens.

However, such revenue gains have rarely been achieved. The difficulty of strengthening local tax reform has reflected technical challenges but also political resistance to reform by elites, and low levels of quasi-voluntary tax compliance among taxpayers – the latter rooted in poor service delivery and government accountability.  Meanwhile, while theories of tax bargaining predict that the expansion of local taxation may drive expanded demands for accountability, such outcomes are far from guaranteed in practice insofar as taxpayers often have limited access to information and few channels through which to engage with government in making expanded demands.

Against this background, a growing body of research has sought to investigate a series of overlapping questions about how to make tax reform more effective:

1. How can greater quasi-voluntary tax compliance be encouraged?
2. How can tax reform be designed to maximize popular engagement, and to foster accountability and the construction of stronger fiscal contracts?
3. How might these processes reshape patterns of political authority and legitimacy, and what might that imply for future tax reform and governance?
4. What is the nature of elite political resistance to enforcement and reform, and how can it be overcome?