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Of Governance and Revenue : Participatory Institutions and Tax Compliance in Brazil

Author

Listed:
  • Touchton,Michael Ryan
  • Wampler,Brian
  • Peixoto,Tiago Carneiro

Abstract

Traditionally, governments seek to mobilize tax revenues by expanding their enforcement of existing tax regimes and facilitating tax payments. However, enforcement and facilitation can be costly and produce diminishing marginal returns if citizens are unwilling to pay their taxes. This paper addresses gaps in knowledge about tax compliance, by asking a basic question: what explains why citizens and businesses comply with tax rules? To answer this question, the paper shows how the voluntary adoption of two different types of participatory governance institutions influences municipal tax collection in Brazil. Municipalities that voluntarily adopt participatory institutions collect significantly higher levels of taxes than similar municipalities without these institutions. The paper provides evidence that moves scholarship on tax compliance beyond enforcement and facilitation paradigms, while offering a better assessment of the role of local democratic institutions for government performance and tax compliance.

Suggested Citation

  • Touchton,Michael Ryan & Wampler,Brian & Peixoto,Tiago Carneiro, 2019. "Of Governance and Revenue : Participatory Institutions and Tax Compliance in Brazil," Policy Research Working Paper Series 8797, The World Bank.
    • Handle: RePEc:wbk:wbrwps:8797
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    Citations

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    Cited by:

    1. von Haldenwang, Christian, 2020. "Digitalising the fiscal contract: An interdisciplinary framework for empirical inquiry," IDOS Discussion Papers 20/2020, German Institute of Development and Sustainability (IDOS).
    2. Mayka, Lindsay & Abbott, Jared, 2023. "Varieties of participatory institutions and interest intermediation," World Development, Elsevier, vol. 171(C).
    3. Alpha Nur Setyawan Pudjono, 2024. "Examining the Causal Relationships of Balanced Scorecard Perspectives on Organizational Performance Improvement: A Case Study from the Indonesian Public Sector," GATR Journals afr232, Global Academy of Training and Research (GATR) Enterprise.

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