Title On the Mechanics of Kleptocratic States: Administrators' Power, Protectors, and Taxpayers' False Confessions
Post date 07/21/2016
C1 Background and Explanation of Rationale

In many countries with weak institutions (like the Democratic Republic of the Congo), administrators can use their positions to extract resources from citizens. Focusing on the context of taxation, we evaluate three experimental interventions designed to increase the bargaining power of taxpayers in their negotiations with tax collectors. We consider three interventions. First, since administrators systematically take advantage of a tax code that is extremely confusing, we organize pro-bono weekly tax consulting to a group of households. The treatment aims to increase taxpayer knowledge of statutory taxes and tax rates. Second, to affect the bargaining power that stems from unequal access to social networks, we extend a link from a reputed civil society organization to randomly selected citizens. We call this the 'protection' treatment as it provides taxpayers with the leverage afforded by being connected to a powerful institution that can advocate on their behalves. Third, we organize a city-wide campaign to expose administrators that have committed abuses in a random sample of neighborhoods.

C2 What are the hypotheses to be tested?

The pre-analysis plan provides a model that yields several testable implications. The main hypotheses are that tax consulting (providing information to taxpayers on statutory taxes and rates) will result in lower average bribes and less frequent bribes to tax collectors. Providing protection to taxpayers (by linking them to civil society networks) may increase the average bribe amount but reduce the frequency. Effects will vary, however, depending on initial priors about mean taxes owed, initial taxpayer weakness, and taxpayer marginalization. The full set of hypotheses are summarized in Table 1 in the attached PAP.

C3 How will these hypotheses be tested? *

We use experiments to assess the impact of providing tax consulting and strengthening taxpayer networks (protection) on the amount and frequency of formal, informal, and total taxes. To measure the outcome, we use a smartphone application that enables households and businesses to report their taxes on a weekly basis for up to five months. We use standard regression techniques to estimate the effects of the treatments, including regressions with fixed effects and controls.

C4 Country The Democratic Republic of Congo
C5 Scale (# of Units) 310
C6 Was a power analysis conducted prior to data collection? No
C7 Has this research received Insitutional Review Board (IRB) or ethics committee approval? Yes
C8 IRB Number PRO16030097
C9 Date of IRB Approval March 28, 2016
C10 Will the intervention be implemented by the researcher or a third party? Researchers
C11 Did any of the research team receive remuneration from the implementing agency for taking part in this research? No
C12 If relevant, is there an advance agreement with the implementation group that all results can be published? No
C13 JEL Classification(s) D73, P16