Corruption and tax morale in Africa
Amadou Boly, Maty Konte & Abebe Shimeles
#2019-042
This paper analyses the effect of the quality of governance (proxied by
perceived corruption) on attitude towards paying tax. Using the
Afrobarometer surveys from 36 African countries over the period
2011-2015, we find that low perception of corruption of different levels
of the Executive branch (President Office, Government Officials or Tax
Authorities) has a significant and positive impact on tax morale. To
account for possible reverse causality between a citizen's perception of
governance quality and attitude towards tax payment, we also propose an
IV approach, using the ethnicity of the country's leader as instrument
for perceived level of corruption. The IV results confirm that an
individual's positive perception of governance has a positive impact on
its willingness to pay tax.
Keywords: Corruption, Taxation, Governance, Africa
JEL Classification: D73, H71, O55