Semi-Autonomous Revenue Authorities (SARAs) have been introduced widely in the Global South with the hope of improving tax performance. However, while implementing the reform is an extensive restructuring and expensive endeavour, there is scarce systematic information on how SARAs have actually performed. This paper examines the average tax performance effect of introducing a SARA in sub-Saharan Africa and finds a positive effect on direct tax revenue, but no effect on indirect or total tax revenue. This is significant as it implies that implementing a SARA is not a quick-fix solution to improving total tax performance, but it does still offer some advantages. Additionally, the heterogeneous effects on direct and total tax revenue highlight the importance of how tax performance is evaluated.

This paper contributes to the debate on domestic revenue mobilization and state-building in the Global South by exploring the concept of fiscal states and the common assumption that such states are present in sub-Saharan Africa. We systematically review the diverse understandings of the fiscal state across relevant literatures to revisit its conceptualization. On that basis, we define the fiscal state as a state whose public revenue base is dominated by tax revenue and loans, and where the relationship between taxation and external and domestic borrowing is balanced and thereby sustainable and characterized by interdependence. We distinguish the fiscal state conceptually from the tax, debt, and rentier states and present a typology of these ideal state types, discussing illustrative empirical examples of different states in sub-Saharan Africa. These illustrate that not all sub-Saharan states can be categorized as fiscal states. This is important because when African states are regarded as fiscal states, assumptions are made about their economic structures; yet, to the extent that these are absent, fiscal policy reforms are unlikely to carry long-term positive effects.

This study is published within the UNU-WIDER project Fiscal states-the origins and developmental implications, which is part of the Domestic Revenue Mobilization programme. The programme is financed through specific contributions by the Norwegian Agency for Development Cooperation (Norad).

No abstract

No abstract