Informal Taxation in Development Projects: the Role of Chiefs in Sierra Leone (Job Market Paper)

Abstract

This paper investigates the relative efficiency of traditional leaders when informally taxing citizens in low-income states and whether this comes at the expense of relatively poor households. I design a field experiment to measure whether citizens engage in costly actions to avoid contributing their labor to a public good. I randomize communities across different methods to select contributors to compare the status quo of chiefs selecting contributors to two alternatives: random lotteries and progressive selection based on household surveys. I use the random selection arm as a benchmark and estimate whether selection by chiefs or progressive selecting are relatively efficient by generating more or less costly behavior from citizens. I also study the heterogenous effects of these treatment arms by household wealth to assess if there is evidence of chiefs being regressive and whether this can be corrected by a simple policy instrument.