Tax bargaining, fiscal contracts, and fiscal capacity in Ghana

A long-term perspective

Bibliographic Data

ID6019950
AuthorsPrince Young Aboagye (0000-0001-6461-8019, Lund University), Ellen Hillbom (0000-0002-0820-2729, Lund University)
Year2020
Volume119
Issue475
Pages177-202
Publication date2020-04-23
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueAfrican Affairs (JOURNAL)
Journal identifiersISSN: 0001-9909 • E-ISSN: 1468-2621
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/afraf/adaa004
OpenAlexW3011487498
LanguageEN
Citations received14

Many Sub-Saharan African countries are unable to generate sufficient tax revenues for public purposes. While it is widely accepted that governments’ ability to tax is shaped by politics, the precise mechanisms through which this relationship takes place in practice remain elusive. Based on a historical analysis of four major tax reforms in Ghana from the 1850s to the late 1990s, this article captures the various ways in which taxpayers negotiate with the state in an attempt to limit the extent of taxation, especially in cases where state reciprocity falls short of what people expect. Our evidence suggests that, far from being a recent development, effective taxation in Ghana has long depended on the ability of the state to convince taxpayers that tax revenues will be used for the public benefit. A history of misappropriation of tax revenues, overt corruption, and profligacy diminished taxpayers’ support for governments’ tax efforts. More generally, the article points to the importance of understanding how tax bargaining works in practice and people’s perceptions of their governments over the long term to overcome resistance to tax reforms

Direct tax · Economic policy · Economics · Indirect tax · Political science · Politics · Public economics · Revenue · State (computer science) · Tax avoidance · Tax reform · Tax revenue · Value-added tax · Finance · Fiscal Policy and Economic Growth · Law · Local Government Finance and Decentralization · Taxation and Compliance Studies

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