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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 analyze 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 challenge this question brings to the fore we will analyze 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 is implemented in collaboration between NUPI and CMI in Norway, and ARGA (Mali), Mzumbe University (Tanzania), and the Platform 4 Dialogue and Peace (Liberia). During the first two years of the project, we have established plans for fieldwork and data collection, and completed the fieldwork in Mali and Tanzania, while the last round of fieldwork in Liberia will be done in January 2024. We postponed this due to the Presidential elections in Liberia in the autumn of 2023. The Mali component of the project was caught up in the increasingly hostile relationship between the government and the international community, but we managed to complete the work in Bamako. Researchers from the project contributed with presentations at the TaxCapDev conference in Bergen in early September 2022, a stakeholder conference organized by the project took place in Liberia in October 2022, and researchers from the project also contributed presentations to the TaxCapDev events in Dakar and Zanzibar in late November 2023. Results from the project will be published as they emerge in the form of working papers and articles. The project has established close contact with relevant user groups in the World Bank, Norad and the Norwegian MFA, and with stakeholder environments in the countries where the project works empirically. The project will now enter a period of intense writing as articles, chapters, and the PhD thesis written under the project, will be finalized for submitting to journals and for the PhD to the University of Oslo.

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.

Publications from Cristin

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NORGLOBAL2-Norge - global partner