Taxation, ownership and accountability: Experimental evidence

Recent political economy research indicates that the well-known positive relationship between taxation and accountability may be driven not by the source of revenues per se but by something that is malleable: citizen’s sense of ownership over the budget. In this paper, we leverage both observational and experimental data to test this mechanism in a real-world policy setting. We field a survey experiment in carefully selected Peruvian districts wherein we manipulate the source of revenues (local taxes vs mining fees), as well as ownership over these revenues, while keeping an important alternative mechanism constant: the size of the budget. We find that it is easier to manipulate ownership over taxes than resource rents, and that low levels of tax awareness hinder ownership over tax revenues. While our treatments have no effect on the level of accountability demands made by respondents, we do find a novel effect on the type of demands that are made, with ownership increasing the demand for particularistic benefits.