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The Fiscal Contract up Close: Experimental Evidence from Mexico City

Author

Listed:
  • Anne Brockmeyer
  • Francisco Garfias
  • Juan Carlos Suárez Serrato

Abstract

Can the provision of public goods strengthen the fiscal capacity of governments in developing countries and move them toward an equilibrium of widespread tax compliance? We present evidence of the impact of local public infrastructure on tax compliance, leveraging a large public investment experiment and individual property tax records from Mexico City. Despite the salience and large effects of these investments on access to infrastructure, property values, and local economic development, we find no changes in property tax compliance and can rule out even small increases. These null effects persist even when taxpayers are reminded about the tax-benefit link.

Suggested Citation

  • Anne Brockmeyer & Francisco Garfias & Juan Carlos Suárez Serrato, 2024. "The Fiscal Contract up Close: Experimental Evidence from Mexico City," NBER Working Papers 32776, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32776
    Note: DEV PE POL
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    Cited by:

    1. Jasmin Vietz & Ingrid Hoem Sjursen, 2025. "Leveraging Religious Leaders to Increase Voluntary Tax Compliance: Experimental Evidence from Tanzania," ifo Working Paper Series 415, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    2. Kevin Grieco & Abou Bakarr Kamara & Niccolo F. Meriggi & Julian Michel & Prichard Wilson, 2025. "Participation, legitimacy and fiscal capacity in weak states: Evidence from participatory budgeting," CSAE Working Paper Series 2025-05, Centre for the Study of African Economies, University of Oxford.

    More about this item

    JEL classification:

    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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