The Implications of Clientelism for State-Building: Evidence from Nigeria

• In Event: Taxation and State Capacity: Insights from the Developing World

Abstract

In weak states, fiscal extraction and redistribution is irregular and often discretionary. Particularly in weak states with competitive regimes, redistribution and extraction can be targeted based on electoral behavior or clientelistically. Attempts to increase state and fiscal capacity in such contexts must thus consider political implications for political patrons and their client voters. In this paper, we describe the political backlash that followed an attempt to increase taxation and registration in one clientelistic setting, Nigeria. We randomly assigned informational encouragements to formally register and pay tax to market vendors in Lagos. In our context, one set of informal actors – market associations – is intimately involved in both fiscal exchange and clientelistic brokerage. Because of the former, we examined the effects of encouragements delivered by formal (IRS) and informal (market association) actors who emphasized either the benefits of tax payment (public goods) or the costs of non-payment (enforcement). While we expected that trusted informal intermediaries would be more effective at brokering fiscal exchange, we actually find the opposite. Not only do market associations fail to induce study participants to formalize, their visit has important electoral consequences. Respondents who received an enforcement message from a market association agent turned out to vote significantly less in the subsequent presidential election. This is especially true for coethnics of the president who are more likely within the clientelistic networks of the market association. Among respondents who voted, coethnics who received the enforcement message from the market association are more likely to have voted for the incumbent party. This is consistent with a strategy by clientelistic brokers to keep opposition voters at home on election day. While these perverse findings were unexpected, they are consistent with the tension between state-building and clientelism. As the state builds its capacity to extract and redistribute more systematically, it undermines the power of political actors who depend on discretion to maintain control.

Authors

• Jessica Gottlieb, University of Houston

• Adrienne LeBas, American University