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Becoming Legible to the State: The Essential but Incomplete Role of Identification Capacity in Taxation

Author

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  • Okunogbe, Oyebola

Abstract

Many lower income countries know little about their citizens and their tax bases, which hinders effective taxation. This paper studies the impact of making the tax base more “legible†and signaling this legibility to taxpayers. Leveraging a new digitized property database, a randomized experiment in Liberia finds that including identifying information (owners’ names and property photographs) in tax notices quadruples the likelihood of payment from 2 percent to over 8 percent, but only when the notice also details noncompliance penalties. The intervention pays for itself within one year, and its effects persist to the 4th year. These results underscore that both legibility and enforcement are essential for taxation.

Suggested Citation

  • Okunogbe, Oyebola, 2025. "Becoming Legible to the State: The Essential but Incomplete Role of Identification Capacity in Taxation," CEPR Discussion Papers 19916, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19916
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    File URL: https://cepr.org/publications/DP19916
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    Keywords

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    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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