Experimental Evidence on Tax Compliance in Malawi

This research article investigates the effectiveness of community-level interventions in enhancing tax compliance in Malawi. It presents findings from a multi-arm field experiment conducted in 128 markets, comparing top-down enforcement strategies with bottom-up quasi-voluntary compliance approaches. The study reveals that the bottom-up intervention significantly increased tax compliance by 40%, fostering greater trust in local government and enhancing political engagement among vendors. In contrast, the top-down approach showed less robust effects on compliance and did not influence trust or satisfaction levels. The article discusses the implications of these findings for understanding taxation dynamics in lower-income countries, emphasizing the importance of community-level processes over individual-level interventions. It also highlights the need for comprehensive strategies that address multiple factors influencing tax compliance, suggesting that single-pronged approaches may be insufficient in low-capacity states. Overall, the research contributes to the literature on taxation by demonstrating the potential for community-focused interventions to reshape citizen-state relations and improve tax compliance outcomes.