Community Pressure Boosts Market Tax Compliance 40% in Malawi

📍 What This Paper Tests

This study asks whether community-level interventions raise tax compliance more effectively than individual-level approaches, and whether top-down enforcement or bottom-up quasi-voluntary strategies work better. The argument is that tax compliance should improve when interventions target communities rather than individuals, and that quasi-voluntary, community-based approaches may also reshape citizen–state relations.

📊 Field experiment in 128 Malawian markets

A multi-arm field experiment was implemented across 128 markets in Malawi to compare two intervention types:

• Top-down (TD) enforcement: more traditional, authority-driven measures to increase tax collection.
• Bottom-up (BU) quasi-voluntary compliance: community-level engagement designed to encourage voluntary payment.

🔎 Key findings

• The BU intervention significantly increased tax compliance by 40%.
• The TD intervention produced a less robust effect on compliance; the difference between TD and BU was not statistically significant.
• The BU intervention also improved several measures of citizen–state relations, including:
• greater trust in government
• higher satisfaction with public services
• increased political engagement
• The TD intervention did not produce these broader relational effects.

💡 Why it matters

Community-level, quasi-voluntary strategies can both boost revenue collection and positively reshape citizen–state relationships. These results suggest that marketing taxation at the community level can be an effective complement to enforcement-focused approaches in efforts to expand government revenue and strengthen state-society ties.