2025/07/18 by Lucy Martin, Brigitte Seim, Simon Hoellerbauer +1 · 1 voice
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Taxation and Avoidance #Fiscal Policy and Economic Growth #Taxation and Compliance Studies
paper · doi:10.1017/s0003055425100774
openalex publication_date 2025/07/18 · openalex created_date 2025/08/10 · openalex updated_date 2026/07/15
Understanding how to increase government revenue via taxation is a core puzzle in state development. Taxation is critical for states to fund public goods, and may have positive spillover effects on citizen-state relations. We argue that tax compliance will be higher when governments employ community-level, rather than individual-level, interventions. To test whether it is more effective to focus such interventions on top-down (TD) enforcement or bottom-up (BU) quasi-voluntary compliance, we ran a multi-arm field experiment in 128 markets in Malawi. We find that the BU intervention significantly increased tax compliance by 40%. The TD intervention had a less robust effect on compliance, although not significantly different from that in the BU group. The BU intervention, but not the TD, also increased trust in government, satisfaction with services, and political engagement. The results show that community-level tax interventions can increase compliance and that quasi-voluntary approaches can positively reshape citizen-state relations.