Does Taxation Improve Electoral Accountability in Sub-Saharan Africa?

Taxation can contribute to state-building through a tax bargain in which taxpayers are willing to increase compliance in return for improved government accountability. In sub-Saharan Africa (SSA) it is typically argued that the fiscal state is weak, with low tax revenues and governments that are not accountable. However, since the early 2000s, SSA countries on average have increased tax/GDP ratios and there have also been increases in measures of accountability. Has the increase in taxation promoted improved accountability? This paper analyses data for up to 47 African countries from 1980 to 2019 and shows a robust positive correlation between tax revenue and vertical accountability (capturing the quality of elections and party competition). Instrumental variable estimation provides support for a causal interpretation. On average, the increase in tax/GDP ratios explains at least ten per cent of the increase in vertical accountability, supporting the emergence of a tax bargain. The effect is weakest in resource-dependent countries.