…political underdevelopment stems to a larger degree from low lev els of dependence of state elites on their own citizens.' 1There is an obvious sense in which resource collection is crucial to Southern states: they need funds to perform their functions and, the more they are able to raise these from domestic sources, the less dependent are they on the politics of aid in Northern countries.But there may be a less obvious dimension to the problem.Thus Moore has suggested that the state's ability to extract resources from domestic actors creates a need to respond to citizens.Logically, the contrary also holds: the more the state derives its resources from foreign aid, or rents derived from commodities traded in world markets, the less the state elite will be oriented to responding to the needs of citizens.Thus, not only does domestic resource extraction through tax enhance the fiscal viability of the state -it makes other forms of political viability more likely by creating a continuing incentive for responsiveness: 'increased taxation produces unintended consequences such as growing demands for political participation and thus demands for a growing popular say in local politics' -hence the familiar slogan: 'No taxation without representation.' 2 1 Mick Moore, 'Political Underdevelopment; What Causes 'Bad Governance'?Public Management Review, 3(3), 2001.See also Mick Moore 'Death without taxes: democracy, state capacity and aid dependence in the fourth world', in M Robinson and G White (eds.).
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Hlope et al. (2002) studied this question.