Journal Article


Does reliance on tax revenue build state capacity in sub-Saharan Africa?

Published on 21 December 2010

Academics and donors have increasingly argued that African states can enhance their general administrative capacity by improving tax revenue collection. Proponents argue that administratively demanding improvements in tax administration may spillover to other areas of public administration by introducing improved practices, necessitating improvements elsewhere and providing data for other government activities.

We make the first effort to test this hypothesis empirically, using an improved cross-country data set for sub-Saharan Africa. We find some evidence that from 1973 until the late 1990s improvements in tax administration tended to precede broader administrative improvements, consistent with the research hypothesis. By contrast, we find no evidence of such a pattern over the past decade.

We conclude that these results provide tentative support for the hypothesis that improvements in tax collection can be a catalyst for broader gains in state capacity, but that such linkages are not guaranteed and depend on the particular character of reform. Points for practitioners Those involved with public administrative reform efforts have long been confronted with the question of whether reform is, or should be, an essentially system-wide process, or focused on developing ‘pockets of effectiveness’.

This debate is particularly relevant to tax reform: a growing academic literature has argued that tax reform can be a catalyst for system-wide change, but the dominant reform model has focused on the creation of autonomous revenue agencies to achieve rapid but focused capacity gains. This research examines the case for believing that tax reform can be a catalyst for broader reform, and thus the case for adopting a reform model that focuses more explicitly on system-wide change.


Image of David Leonard

David Leonard

Visiting Fellow

Image of Wilson Prichard

Wilson Prichard

IDS Research Fellow and ICTD Chief Executive Officer

Publication details

Prichard, W. and Leonard, D.
International Review of Administrative Sciences, volume 76, issue 4


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