Taxation and the Unequal Reach of the State: Mapping State Capacity in Ecuador

Abstract

Even though the unequal reach of the state has become an important concern in the literature on developing democracies in Latin America, empirical measures of intracountry variation in state capacity are scarce. So far, attempts to develop valid measures of the reach of the state have often been hampered by inadequate data. Leveraging insights from national‐level scholarship, this article proposes a tax‐based measure to capture such intracountry variation. Drawing on a comprehensive data set of municipal finance and estimates of economic activity derived from nighttime lights, it maps state capacity in Ecuador. The article validates the measure on the basis of survey data collected by the Latin American Public Opinion Project. A multilevel analysis demonstrates that citizens tend to be more satisfied with the services provided by the state in municipalities with higher state capacity, which strengthens confidence that the measure picks up relevant differences.

Taxing Higher Incomes: What Makes the High-Income Earners Consent to More Progressive Taxation in Latin America?

“…However, this is a minor concern in our analysis, given our construction of the wealth indicators, which rely on household wealth rather than individual wealth. We add a control for living in either urban or rural areas, as the experience with public institutions might vary between living in the centre and on the periphery, leading to unequal access to state institutions (see Harbers 2015). Furthermore, we add attitudinal variables such as political ideology, social trust and fairness perceptions about deservingness of public goods in order to hold constant the individual's belief system (see Heinemann and Hennighausen 2015).…”

“…Finally, also Fig. 4 Average marginal effect of wealth group on the probability to support progressive taxation at different levels of trust in political institutions (M6) urban dwellers are less supportive of progressive income taxation, which might be explained by proximity to the sources of public goods provision (see Harbers 2015).…”

Roads to Rule, Roads to Rebel: Relational State Capacity and Conflict in Africa

“…In the Central African Republic, RSC is lowest in the northern region Vakaga from where the Seleka rebels toppled the government in 2013. Cut off from the capital during the rainy season but internally interconnected, Vakaga is outside the government's reach, and its inhabitants rarely use the national language and currency (International Crisis Group 2007, 2015. In the DRC, we find that RSC is up to 350% higher among groups located in the west of the country compared to those in the Eastern Kivu region.…”

Politics in Space

“…An illustration of this approach is O'Donnell's (1999) conceptual map of the state according to what he calls blue, green, and brown areas, where each color denotes progressively greater deficits in the rule of law. State capacity and the quality of institutions often vary significantly within countries (e.g., Harbers, 2015). While residents of shanty towns may formally be entitled to the same rights and protections as residents of upper-middle-class neighborhoods, they generally cannot expect proper treatment from the justice system.…”