This paper presents the findings of research on the political economy of taxation undertaken in several countries by the Crisis States Research Centre. The countries considered in the research are Zambia, Rwanda, Mozambique, Uganda, Tanzania, Democratic Republic of Congo, Afghanistan, the Philippines and Colombia. The paper has five main aims. First, it identifies how patterns of taxation can be a useful indicator of state performance in general, and the extent to which a state tends to be more fragile or more resilient in particular. Second, it explores the relationship between elite bargains and patterns of taxation. In particular, it explains how taxation reflects the nature of elite bargains and, in turn, how the dynamics of elite bargains affect tax patterns and capacity. Third, it assesses how aid flows affect patterns of state-building. In particular, it focuses on the extent to which aid creates problems of the 'dual public sector'. Fourth, it considers the links between taxation and production strategies, that is, the extent to which taxation is developmental. Finally, it suggests policy implications that emerge from the research and suggests areas for further investigation.
Working Paper No. 84 (series 2), London, UK; Crisis States Research Centre, 37 pp.