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NORGLOBAL2-Norge - global partner

Strengthening Fragile States through Taxation

Alternative title: Sårbare stater, statsbygging og skatt

Awarded: NOK 11.0 mill.

The existing literature on weak statehood, fragile states and state-building has produced important insights. However, while, the many necessary tasks that states are expected to perform are well researched, the question about where the funding for this should come from is largely absent in the literature. The FRAGTAX project therefore starts from the assumption that the missing piece in the state building puzzle is domestic revenue, and the only way this can be raised is through institutional procedures for domestic taxation. The research challenge is that we remain in the dark concerning how political rule in fragile states work, and under what circumstances other actors inside or outside the state, undermine or explicitly challenge the tax administration of the state. FRAGTAX’s point of departure is that state-building and taxation cannot properly be understood without investigating conditions of political authority. To address this, we have developed a novel approach to analysing the conditions under which different forms of fiscal authority emerge, and how it is reproduced, transformed or contested. Based on this FRAGTAX asks the fundamental question: Why do some countries succeed in building functional tax regimes and others not? To respond to the research challenge this question brings to the fore we will analyse how the political authority to tax is established, exercised and maintained over time in three selected cases that display varying forms of political authority over fiscal capacity and taxation, namely Liberia, Mali and Tanzania. FRAGTAX will be implemented in collaboration between NUPI and CMI in Norway, and ARGA (Mali), Mzumbe University (Tanzania), and the Platform 4 Dialogue and Peace (Liberia).

State-building requires predictable income, and domestic taxation is the essential component. In the absence of an autonomous domestic revenue base, the many necessary activities that states are expected to perform and that the international community attempts to assist fragile states in fulfilling – such as protecting borders and the population, providing justice, and delivering basic services – become impossible. We argue that the missing piece in the state-building puzzle is domestic revenue, and the only way this can be raised is through institutional procedures for domestic taxation. The research challenge is that we remain in the dark concerning how political rule in fragile states work, and under what circumstances other actors inside or outside the state, undermine or explicitly challenge the tax administration of the state. This leads us to ask the fundamental question: Why do some countries succeed in building functional tax regimes and others not? FRAGTAX’s point of departure is that state-building and taxation cannot properly be studied without making inquiries into the conditions of political authority. Our response to this challenge is to therefore analyse how the political authority to tax is established, exercised and maintained over time. To explain variation in why some states are more successful in building functional tax regimes than others, FRAGTAX has selected three cases with varying forms of political authority over fiscal capacity and taxation: Liberia, Mali and Tanzania.

Funding scheme:

NORGLOBAL2-Norge - global partner