Cities can fall into a detrimental cycle wherein citizens do not pay taxes and fees to the city and the city fails to provide government services to citizens. The lack of service provision justifies the evasion of taxes and the lack of tax revenue prevents governments from providing services. In the Malawian city where we conduct our study, one principal manifestation of failing service provision is the lack of solid waste management in some areas of the city. Four city wards in our study city receive no waste collection and minimal government services. This study evaluates an intervention that facilitates the expansion of waste collection in order to encourage citizens to pay city taxes and thereby formalize their relationship with the city.
Intervention Date: September 2017 – July 2018
The intervention provides incentives and reduces barriers for citizens to make tax payments. The un-serviced city wards of the city are split into 90 neighborhoods of about 30 households each. The intervention is available to households in 60 of these neighborhoods, while 30 neighborhoods will be in a pure control condition where no households receive information about the intervention. In the 60 treatment neighborhoods, 20% of households will receive information about the intervention, while the other 80% of households have access to the intervention but receive no information about it. Everyone in treatment neighborhoods who pays taxes receives 6 months of waste collection, but for anyone to receive waste collection after 6 months a threshold percentage of households in each neighborhood must begin paying taxes. We then measure the effects of receiving information about the intervention and the spillover of that information to other households.
- H1: Households provided with and informed about incentives to pay taxes are more likely than other households to pay taxes.
- H2 A: Households that pay taxes and receive waste collection are more likely than other households to continue paying taxes in the future.
- H2 B: Households that pay taxes and receive waste collection will express more positive views towards government than other households.
- H2 C: Households that pay taxes and receive waste collection are more likely than other households to formalize their relationship with the government in ways other than tax compliance.
- H3: Information about incentives given to certain households will spillover into geographically proximate households.