building trust is not a substitute for enforcement, but a complement. Consistent with this view, research has highlighted the _political_ payoffs to crackdowns on illegal tax evasion,<sup>83</sup> and to linking public services more clearly to new revenue collection.<sup>84</sup> In Colombia, for example, the government struggled to generate buy-in from elites for an income tax increase, but ultimately secured political support and expanded compliance by earmarking the income tax levy for security spending – a priority for income tax payers.<sup>85</sup> Building trust as part of tax reform strategies seems likely to be particularly important in developing countries, where trust in tax authorities is limited, compliance is poor and political support for taxation is low. Illustratively, across 36 countries in 2014/2015, Africans expressed more trust in informal institutions such as religious and traditional leaders (72 percent and 61 percent respectively) than in the tax department (on average 44 percent). More than one-third of Africans report believing that all or some people working for domestic tax agencies are corrupt.<sup>86</sup> Moreover, there is extensive evidence of unfairness and inequity in tax burdens: weak enforcement among elites exists alongside often heavy burdens of smaller, formal and informal, taxes, fees and levies on lower-income taxpayers. A relatively small number of existing studies correspondingly suggests that even small measures to enhance trust can lead to substantial improvements in compliance, and, likely, reduce political resistance to reform.<sup>87</sup> A focus on building trust can therefore plausibly be conceptualized as helping countries to escape a low-level equilibrium in tax collection. Taxpayers would theoretically be willing to pay more taxes in exchange for more effective service provision by governments. However, a lack of trust leads to non-compliance and a lack of support for expanded enforcement. Meanwhile, governments would like to collect more revenue, but are unwilling to bear the short-term political costs of increasing enforcement, and do not trust that taxpayers will reward them politically even if new revenues are translated into improved services. Neither side wants to move first. A strategic focus on building trust can help to break this impasse by making tax reform more popular, and thus generating both short- and long-term political payoffs to reform.<sup>88</sup>

> 83 Casaburi, L., & Troiano, U. (2016). Ghost-House busters: The electoral response to a large anti-tax evasion program. _The Quarterly Journal of Economics_ , 131 (1):273-314.

> 84 Jibao, S., & Prichard, W. (2015). The political economy of property tax in Africa: Explaining reform outcomes in Sierra Leone. _African Affairs_ , 114 (456):404-431; Prichard, W. (2015). _Taxation, Responsiveness and Accountability in Developing Countries: The Dynamics of Tax Bargaining_ . Cambridge: Cambridge University Press.

> 85 World Bank. (2015). _Colombia - Enhancing fiscal capacity to promote shared prosperity development policy loan project_ . Washington: World Bank.

> 86 Bratton, M. and Gyimah-Boadi, E. (2016). Do trustworthy institutions matter for development? Corruption, trust, and government performance in Africa. _Afrobarometer. Dispatch No. 112_ . Afrobarometer; Isbell, Thomas (2017). Tax Compliance. Africans affirm civic duty but lack trust in tax department. _Afrobarometer Policy Paper No. 43_ . Afrobarometer.

> 87 See, for example, Prichard (2015) on the use of earmarking to secure political support for tax reform, Jibao and Prichard (2015) on trust building to underpin property tax reform in Sierra Leone, and Mascagni et al. (2016) on the use of SMS messages stressing reciprocity in encouraging income tax compliance. Prichard, W. (2015). _Taxation, responsiveness and accountability in developing countries: The dynamics of tax bargaining_ . Cambridge: Cambridge University Press; Jibao, S., & Prichard, W. (2015). The political economy of property tax in Africa: Explaining reform outcomes in Sierra Leone. _African Affairs_ , 114 (456):404-431; Mascagni, G., Nell, C.,& Monkam, N. (2017). One size does not fit all: A field experiment on the drivers of tax compliance and delivery methods in Rwanda. _ICTD Working Paper 58_ . Brighton: International Centre for Tax and Development.

> 88 Lagos, Nigeria, offers an interesting example of this kind of positive dynamic. Cheeseman, N., & de Gramont, D. (2017). Managing a mega-city: Learning the lessons from Lagos. _Oxford Review of Economic Policy_ , 33 (3):457-477.

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