To the top

Page Manager: Webmaster
Last update: 9/11/2012 3:13 PM

Tell a friend about this page
Print version

Fiscal capacity in "post"… - University of Gothenburg, Sweden Till startsida
Sitemap
To content Read more about how we use cookies on gu.se

Fiscal capacity in "post"-conflict states: Evidence from trade on Congo river

Journal article
Authors Ola Olsson
Peter Martinsson
Maria Eriksson Baaz
Published in Journal of Development Economics
Volume 146
Issue September
ISSN 0304-3878
Publication year 2020
Published at Department of Economics
Language en
Links https://doi.org/10.1016/j.jdeveco.2...
Keywords Taxation Congo Trade Corruption River transport
Subject categories Economics

Abstract

In many post-conflict states with a weak fiscal capacity, illicit domestic levies on trade remain a serious obstacle to economic development. In this paper, we explore the interplay between traders and authorities on Congo River - a key transport corridor in one of the world’s poorest and most conflict-ridden countries; DR Congo. We outline a general theoretical framework featuring transport operators who need to pass multiple taxing stations and negotiate over taxes with several authorities on their way to a central market place. We then examine empirically the organization, extent, and factors explaining the level of taxes charged by various authorities across stations, by collecting primary data from boat operators. Most of the de facto taxes charged on Congo River have no explicit support in laws or government regulations and have been characterized as a “fend for yourself”-system of funding. Our study shows that traders have to pass more than 10 stations downstream where about 20 different authorities charge taxes. In line with hold-up theory, we find that the average level of taxation tends to increase downstream closer to Kinshasa, but authorities that were explicitly prohibited from taxing in a recent decree instead extract more payments upstream. Our results illustrate a highly dysfunctional taxing regime that nonetheless is strikingly similar to anecdotal evidence of the situation on the Rhine before 1800. In the long run, a removal of domestic river taxation on Congo River should have the potential to raise trade substantially.

Page Manager: Webmaster|Last update: 9/11/2012
Share:

The University of Gothenburg uses cookies to provide you with the best possible user experience. By continuing on this website, you approve of our use of cookies.  What are cookies?