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Trust, Corruption, and Tax Compliance in Fragile States: On a Quest for Transforming Africa into Future Global Powerhouse

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  • Hafte Gebreselassie Gebrihet

    (Department of Pedagogy, Religion, and Social Studies, Western Norway University of Applied Sciences, 5063 Bergen, Norway
    Department of Civics and Ethical Studies, Adigrat University, Adigrat P.O. Box 50, Tigray, Ethiopia)

  • Yibrah Hagos Gebresilassie

    (Department of Economics, Aksum University, Aksum P.O. Box 1010, Tigray, Ethiopia)

  • Gabriel Temesgen Woldu

    (Institute of Economics and Economic Development, Theoretical Economics Department, University of Szeged, 6722 Szeged, Hungary
    Department of Economics, Adigrat University, Adigrat P.O. Box 50, Tigray, Ethiopia)

Abstract

This study explores the complex relationship between trust, corruption, and tax compliance in fragile states. It examines factors influencing public trust in three government branches: the ruling party (a proxy for the executive), the parliament, and the local government, and examines whether trust in these arms of government impacts tax compliance. We conducted this investigation using Afrobarometer survey data from Guinea, Mali, Sudan, and Zimbabwe as case studies. The study found that restoring public trust and promoting tax compliance are tangible outcomes arising from a steadfast commitment to electoral integrity, transparency, and accountability. This interplay becomes more vital within the framework of state fragility, where institutions are highly strained. The study highlighted that the existence of rampant corruption reduces trust in the ruling party, parliament, and local government council. Furthermore, the joint interaction between corruption and lack of trust significantly undermines the willingness of taxpayers to adhere to tax administration laws. These insights emphasise that combating corruption becomes not only a governance step but also vital to state stability. Thus, African governments should prioritise electoral integrity and combat corruption through enhanced accountability to pave the way for improved governance, enhanced trust, and a more stable path toward a global powerhouse.

Suggested Citation

  • Hafte Gebreselassie Gebrihet & Yibrah Hagos Gebresilassie & Gabriel Temesgen Woldu, 2023. "Trust, Corruption, and Tax Compliance in Fragile States: On a Quest for Transforming Africa into Future Global Powerhouse," Social Sciences, MDPI, vol. 13(1), pages 1-21, December.
    • Handle: RePEc:gam:jscscx:v:13:y:2023:i:1:p:3-:d:1303430
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    References listed on IDEAS

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    1. Jeffrey M Wooldridge, 2010. "Econometric Analysis of Cross Section and Panel Data," MIT Press Books, The MIT Press, edition 2, volume 1, number 0262232588, April.
    2. Vallings, Claire & Moreno-Torres, Magui, 2005. "Drivers Of Fragility: What Makes States Fragile?," PRDE Working Papers 12824, Department for International Development (DFID) (UK).
    3. Ahlerup, Pelle & Baskaran, Thushyanthan & Bigsten, Arne, 2017. "Regional development and national identity in sub-Saharan Africa," Journal of Comparative Economics, Elsevier, vol. 45(3), pages 622-643.
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