How do social contracts come into being? This paper argues that norm adoption plays an important and neglected role in this process. Using novel data from urban Nigeria, we examine why individuals adopt norms favoring a citizen obligation to pay tax where state enforcement is weak. We find that public goods delivery by the state produces the willingness to pay tax, but community characteristics also have a strong and independent effect on both social contract norms and actual tax payment. Individuals are less likely to adopt pro-tax norms if they have access to community provision of security and other services. In conflict-prone communities, where “self-help” provision of club goods is less effective, individuals are more likely to adopt social contract norms. Finally, we show that social contract norms substantially boost tax payment. This paper has broad implications for literatures on state formation, taxation, clientelism, and public goods provision.
Bodea, C.; LeBas, A. The Origins of Social Contracts: Attitudes toward Taxation in Urban Nigeria. Centre for the Study of African Economies, University of Oxford, Oxford, UK (2013) 44 pp. [CSAE Working Paper WPS/2013-02]
The Origins of Social Contracts: Attitudes toward Taxation in Urban Nigeria