VoxEU Column

Technology and local state capacity: Evidence from Ghana

Studies show that investing in a government’s capacity to collect tax revenues is beneficial for economic development of low-income countries. This column uses new census data from local governments in Ghana to provide descriptive and experimental evidence on the role of technology in improving government tax capacity. The pre-existing infrastructure for tax collection in the country is poor, and the technology increases the number of delivered tax bills by 27% and increases the amount of revenue collected by 103%. Despite these favourable impacts, the technology also increases the incidence of bribes, qualifying the policy rationale.