Urbanization, Privatization, and the Social Contract

• In Event: Markets Economy and State Capacity

Abstract

Africa is urbanizing at an incredibly rapid rate. Over the coming 20 years, we expect urban populations on the continent to double. According to canonical theories in political science, urbanization – its concomitant growing middle class – should be conducive to democratization and a robust social contract. However, more recent scholarship casts doubt on the applicability of these predictions for contemporary urbanization in Africa. One specific reason to be skeptical of the democratizing role of the middle class is that middle- and upper-class urban Africans increasingly reside in private, and often gated, communities. In many of these middle-class neighborhoods, services that we typically understand as being under the purview of the state – such as security, water, road maintenance, and electricity – are instead privately provided by a real estate developer or property management company. The literature on private communities and private service provision broadly characterize this choice as an “exit,” or disengagement, from the state. If these populations are, in fact, opting out of the social contract, it seems unlikely that they would operate as a significant political force. Further, those who receive less from the state should also theoretically be less willing to pay taxes, which would in turn limit the development of a virtuous cycle of service-delivery, taxation, and accountability. What are the implications of this form of housing and the accompanying private service delivery and governance for the relationships between citizens and their government? How does the middle class actually engage in politics in urbanizing Africa?

In this paper, I contribute to this debate about the political role of the middle class in newer democracies in the Global South. Specifically, I explore how the particular types of neighborhoods in which the middle-class reside shape their relationship with the state and therefore condition their political attitudes and behavior. While we might expect that receiving private governance and services would be associated with political disengagement, in terms of both tax payment and participation, I instead show that the relationship with the state changes, but for different reasons that previously proposed. This is because moving into an estate is a more collective form of “exit” than typically considered in the literature on private service delivery. I consider two inter-related behavioral outcomes -- tax compliance and participation -- and also look at related political attitudes such as support for democratic values and beliefs about redistribution. First, in regards to tax compliance, I argue that residents of private estates are more likely to pay their property taxes and outline three potential mechanisms through which neighborhood type could relate to tax payment. Next, I consider political participation, asking whether the typically-theorized link between taxation and participation holds in this context. To interrogate this, I use a combination of administrative data on tax compliance and original survey data from Lagos, Nigeria. Results indicate that while estate residence shapes the social contract, it is in different ways than the existing literature on private service delivery would suggest.

Author

• Nicole E. Wilson, Northwestern University