Citizen Voices in Tax Reform: The Need for Evidence from the Developing World

Written by Andrew Wainer, Director of Policy Research at Save the Children

Global momentum on tax and development is escalating this year with the February Global Conference of the Platform for Collaboration on Tax, discussions on tax policy to reduce inequality at the World Bank Spring Meetings in April, and the upcoming tax capacity building conference hosted by Sweden.

These dialogues often emphasize the role of governments and multilateral institutions in harnessing tax systems to finance the Sustainable Development Goals (SDGs). While governments play a central role in taxation, Save the Children is focusing on the role of citizens in shaping their own tax systems in the developing world, specifically through our work with civil society at the sub-national level in Kenya.

Traditionally, donor countries haven’t prioritized investments in civil society. As we’ve revealed in a previous postonly 3% ($6 million) of the total $191 million in DRM support provided by all donors in 2015 was channeled directly to civil society or citizen groups.

This is much less than the 12% ($21 billion) of the total $174 billion in foreign assistance that was disbursed to local civil society or NGOs across all sectors. And it is even lower compared to the percentage of foreign assistance channeled to citizens and civil society in other large development sectors including:

  • Basic education (16%)
  • Basic health (21%)
  • Government and Civil Society (23%)

Expert Consensus on Citizen Engagement

At the conceptual level, there is broad expert agreement on the importance of mobilizing political will to make domestic resource mobilization (DRM) inclusive and accountable. Privileged interests are unlikely to change through a purely technocratic approach to DRM.

As Maya Forstater of the Center for Global Development states in the Tax and Development: New Frontiers of Research and Action brief, “The main enabler [to increasing DRM] is political commitment strong enough to overcome vested interests among taxpayers, politicians, and tax administrators themselves.”

That’s where citizen engagement can play a key role – supported by donors when and where it’s appropriate.

In the journal Public Administration and Development, economist Odd-Helge Fjeldstad states, “Donors should complement the traditional ‘technical’ approach to tax reform with measures that encourage constructive engagement between governments and citizens over tax issues.”

This isn’t always reflected in DRM technical assistance.

As Fjeldstad states, “Although donors and tax practitioners seem to acknowledge the importance of these issues, they have yet to be translated into a clear-cut governance-focused tax reform agenda in practice.”

This is partly due to the lack of empirical research on the impact of civil society on DRM. But while this research base is nascent, there are examples of citizen engagement being a driving force behind effective DRM.

School books and crayons are given to children at the start of the school year, Oct. 3, 2017 in Assuit, Egypt
School books and crayons are given to children at the start of the school year, Oct. 3, 2017 in Assuit, Egypt

Cases from the field

Chile has one of the most effective tax systems in Latin America, due in part to the broad societal engagement that occurred during its transition from dictatorship to democracy during the 1990s.

In the report, Taxation and State Building: Towards a Governance Focused Tax Reform Agenda, Wilson Prichard states that while this in part due to technocratic reform, “Many dramatic improvements in the Chilean tax system can be traced to…when representatives from across the political spectrum came together [to establish]…an inclusive fiscal pact.”

There are also examples in Africa of how citizen engagement played a decisive role in tax policy.

In Ghana during the mid-1990s, a government proposal to introduce a value added tax (VAT) without public consultation was met by massive public protest and, “The government was forced to quickly repeal the tax…The protests were sufficiently large and unexpected to fundamentally shake government confidence, leading it to significantly expand the inclusiveness of its governing style.” Prichard states that the protests, “Succeeded in bringing together political elites, businesses and small taxpayers in making shared demands on government.”

Citizens and civil society can also enhance tax administration in smaller, less dramatic ways, for example by collaborating with revenue authorities to collect taxes. In Guinea, market traders’ associations’ helped to monitor and enforce payment of market taxes in return for government investments in improved market facilities. This community monitoring approach, “contributed to dramatic improvements in both revenue yields and public service delivery.”

In spite of these examples that societal engagement enhances DRM efforts, more evidence is needed.
Fortunately, the role of civil society in DRM is generating increasing dialogue among analysts and advocates. In Stockholm, tax for development discussions will include a focus on the role that civil society plays in tax capacity building.

For our part, as Save the Children launches its tax policy citizen engagement project in Kenya, we aim to be both a consumer and producer of evidence on how citizens can shape DRM in the developing world to better serve the needs of societies’ most vulnerable citizens.

Gender Equality Data Gaps

A Leap in Gender Equality Begins with Better Data

By George Ingram and Nora O’Connell | Photo credit: Victoria Zegler

While the movement for global gender equality is growing – including prominent placement at the recent World Bank and IMF Spring Meetings – major gaps remain that, if addressed, could unleash significant progress. One of the first gaps that United States foreign assistance agencies should tackle is the lack of uniformity on the gender equality data they collect and use.

Our institutions – the Brookings Institution and Save the Children – recently teamed up to host a roundtable with current and former U.S. government (USG) officials, private sector, academic, and non-profit experts to examine the data gaps in gender programming and investments.

We agreed more rigor is needed in calculating U.S. government investments in gender equality globally, and more importantly, determining what these investments are achieving and teaching us about what works. This will help to shift U.S. aid from outputs and earmarks to impact and move us closer to genuine equality.

According to the most comprehensive data on foreign assistance for gender equality – the OECD’s gender equality policy marker – during 2014/2015 about 21 percent of all USG foreign assistance included some focus on gender equality. This puts it behind the average of most donors from highly developed nations who dedicated an average of 35 percent of their foreign assistance to gender equality.

The OECD’s gender equality policy marker is the only comprehensive measure of the extent to which the USG dedicates its foreign assistance to gender equality. And while this marker was a major step forward in measuring how much foreign assistance goes to gender equality programming by donor and sector, major gaps remain — including information about what these investments are achieving.

Various USG agencies have made strong commitments to improving gender data and are making progress on collecting and reporting their impacts and challenges – a continued focus on advancing gender data is vital.

Perhaps one of the greatest challenges to USG collection of high-quality gender data is the lack of uniformity of approach among USG foreign assistance agencies. USAID, the State Department, the Millennium Challenge Corporation and others are all collecting gender data on their programs and financing, but there is little consistency across the data. This makes it impossible to ascertain the full extent to which the United States is supporting gender equality around the world and whether those programs are truly making a difference at eliminating the disparities between women and men, girls and boys.

If we invested in the collection of more detailed data, USG could also improve its programming on gender equality. When the USG agreed to the Sustainable Development Goals, we committed to collecting more sex-and age-disaggregated data on project outcomes. As an example, this will not only allow us to compare the under-5 nutritional outcomes of boys versus girls and the employment rates in fisheries of men versus women; it will also enable us to see if women’s employment is translating into greater decision-making power at the household level or in the public sphere.

From the roundtable discussion, we identified three actions we must undertake to address gender data gaps:

1) Leverage New Momentum for Aid Reform

The gender data gap is ultimately an aid effectiveness issue. With reform momentum gaining at USAID and the State Department, we can demonstrate the benefits of quality gender data in terms of boosting development outcomes. Ultimately, there is a cost associated with improving data collection and we need to foster political will in order to back this up and garner the support we need to make better gender data a reality.

2) Listen to Voices on the Ground

The USG should finance more citizen-generated data as well as engage diverse local stakeholders in monitoring, evaluation, and learning related to USG gender equality programs. Data drives so much of what people working on the ground do and it’s important to incorporate their voices into this conversation. Fully engaging with actors on the ground will ensure that the USG is strategically targeting data collection and bringing all the efforts together to maximize impact. Additionally, by connecting with people at the local level, we can learn how quality gender data contributes to women’s empowerment and better development outcomes, enhancing the case for further data investment.

3) Establish a Cohesive Gender Data Reform Agenda

As noted above, gender experts are saying we need fewer data silos. Currently gender data is fragmented across USG agencies and sectors. We need a comprehensive data approach so data can be efficiently collected and compared across USG agencies. Furthermore, we need an agreed-upon set of program and funding targets that are measurable so we can know whether or not we are accomplishing what we set out to do.

By working to improve and standardize data collection, analysis, and use across all sectors, the U.S. government can be a leader in catalyzing a quantum leap towards gender equality and the empowerment of women and girls around the world.

Learn more about Save the Children’s Global Advocacy at https://www.savethechildren.org/us/what-we-do/global-programs/global-advocacy.

 

This post was originally published on the Brookings Institution’s Future Development blog.