Summary

This paper examines the relationship between citizens’ support for taxation and their experiences along two dimensions of the social contract: (1) government provision of infrastructure and public services, and (2) the perceived fairness of the government in dealing with their ethnic group. First, using cross-sectional Afrobarometer survey data from 23 countries, it finds descriptive evidence that individuals in communities with better public infrastructure are more supportive of taxation. In contrast, individuals from ethnic groups that perceive themselves to be treated unfairly by the government are less accepting of taxation. Second, for a more causally identified relationship, it uses Afrobarometer Survey data across 17 countries over 4 rounds and exploits longitudinal variation in the ethnicity of national leaders. It finds that individuals in the ethnic homeland of national leaders are more supportive of taxation and also have access to better government infrastructure. These results highlight potential negative fiscal consequences of ethnic favoritism that exclude certain groups from the social contract.