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Oil Windfalls, Taxation, and Demand for Government Accountability

Author

Listed:
  • Alexander James

    (Department of Economics, University of Alaska Anchorage)

  • Dilek Uz

    (Department of Economics, University of Nevada Reno)

Abstract

What determines demand for government accountability? According to the theory of the rentier state, taxation engages an otherwise acquiescent electorate and increases demand for public transparency, accountability, and fiscal efficiency. This paper tests this theory using an online survey-experiment administered in the United States in which subjects are randomly assigned to one of five informational treatments describing the waste or embezzlement of income or oil-tax revenue. We then assess subject demand for accountability. Several insights emerge. First, intentions matter; embezzlement is punished more severely than incompetence. Second, income-tax embezzlement is punished more severely than oil-tax embezzlement, but only among high-income earners. Third, there is weak evidence that patronage (in the form of an oil-financed tax cut) reduces demand for accountability. Considered jointly, these results suggest an interesting Catch-22 in which a lack of taxation causes government waste and corruption, which is often then used to justify opposition to taxation.

Suggested Citation

  • Alexander James & Dilek Uz, 2022. "Oil Windfalls, Taxation, and Demand for Government Accountability," Working Papers 2022-02, University of Alaska Anchorage, Department of Economics.
    • Handle: RePEc:ala:wpaper:2022-02
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    File URL: http://www.econpapers.uaa.alaska.edu/RePEC/ala/wpaper/ALA202202.pdf
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    More about this item

    Keywords

    Rentier States; Public Finance; Voter Apathy; Political Resource Curse; Survey Experiment;
    All these keywords.

    JEL classification:

    • Q38 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Government Policy (includes OPEC Policy)
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue

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