Publications
Strategic or Confused Firms? Evidence from “Missing” Transactions in Uganda with Miguel Almunia, Jonas Hjort, and Lin Tian. The Review of Economics and Statistics (2024) 106 (1): 256–265
Are firms sophisticated maximizers, or do they consistently make errors? Using transaction-level data from Ugandan value-added tax returns, we show that sellers and buyers report different amounts 79 percent of the time, despite invoices being easily cross-checked. We estimate that 27 percent of firms are disadvantageous misreporters—they misreport own sales and purchases such that their tax liability increases—while 73 percent are advantageous misreporters. Many firms—especially disadvantageous misreporters—fail to (or under- ) report transactions they themselves reported at customs, increasing their VAT liability. Unilateral VAT misreporting cost Uganda about USD 383 million in foregone 2013-2016 tax revenue.
Working Papers
Firm Networks and Tax Compliance: Experimental Evidence from Uganda with Miguel Almunia, David Henning, Dorothy Nakyambadde and Lin Tian (2025) Revision requested: American Economic Journal: Economic Policy.
How do policy interventions diffuse through firm transaction networks? We design a novel two-stage randomization strategy that assigns a tax enforcement treatment at the seller–buyer link level and ensures separation within the network to identify direct and spillover effects. Using Ugandan transaction-level VAT data, we find that treated links correct 23.8% of reporting discrepancies, fourteen times the control rate. Corrections are driven by sellers—even when only buyers receive letters—providing evidence of communication between firms. Spillovers extend to other transactions, with persistent improvements in post-treatment reporting. Sellers evade by reclassifying firm-to-firm transactions as unverifiable final sales, weakening the VAT’s self-enforcing property.
[IFS working paper] [Previous version: CEPR Discussion paper]
Discretion versus Algorithms: Bureaucrats, Tax Equity and Acceptability with Victor Pouliquen and Bassirou Sarr (2026)
Algorithms are becoming ubiquitous and yet there is scarce evidence from real-life settings allowing to evaluate an algorithm’s accuracy, equity and acceptability in comparison to the alternative decision process. We study the introduction of an algorithm in place of bureaucrat discretion in the expansion of the property tax register in Senegal’s capital city. We randomly assign neighborhoods to valuation methods with different combinations of bureaucrat discretion and algorithm prediction and compare the registered property values against a benchmark of market values provided by licensed real estate assessors. Bureaucrats lead to an inaccurate and regressive tax roll: the median tax rate is 3.8% in the lowest quintile and 1.7% in the top quintile, instead of the expected 4.4% and 8.6% rates based on the tax code. In contrast, a rule-based system where bureaucrats record property characteristics that an algorithm then uses to compute values significantly reduces this tax gap. A pure rule with no bureaucrat inputs yields the highest accuracy and equity. We show this is due to bureaucrats’ lack of knowledge about high-end properties and their fairness concerns, and not due to collusion between bureaucrats and property owners. Taxpayers are indifferent to the use of an algorithm, and slightly favorable when told the algorithm increases equity.
[Previously circulated as: Discretion versus Algorithms: Bureaucrats and Tax Equity in Senegal] [Funding: EDI-CEGA, FID, J-PAL DigiFI]
This paper sheds light on the fiscal trajectories of 18 former French colonies in Africa from colonial times to the present. Building upon own previous work about colonial public finance (Cogneau et al., 2021), we compile a novel dataset by combining previously available data with recently digitized data from historical archives, to produce continuous and comparable public revenue data series from 1900 to 2018. This allows us to study the evolution of the level and composition of fiscal revenues in the post-colonial decades, with a special focus on the critical juncture of independence. We find that very few countries achieved significant progress in fiscal capacity between the end of the colonial period and today, if we set aside income drawn from mineral resources. This is not explained by a lasting collapse of fiscal capacity at the time of independence. From 1960 to today, the reliance on mineral resource revenues increased on average and dependence on international commodity prices persisted, with few exceptions. The relative contribution of trade taxes declined after the structural adjustments, and lost trade revenues were not compensated by a sufficient increase in domestic taxes. However, for the most recent period, we do note an improvement in the capacity to collect taxes on the domestic economy.
Work in Progress
Scaling Fiscal Capacity: Evidence from Senegal's Capital City with Bilal Choho and Victor Pouliquen
Analysis in progress. Draft available upon request. [Funding: FID] [AEA RCT Registration]
Can Digitization help foster Synergies between Urban Service Delivery and Local Revenue Mobilization? with Hamidou Jawara, Joseph Levine, Abdoulaye Ndiaye and Victor Pouliquen
Analysis in progress. [Funding: JPAL DigiFI; FID] Location: Kanifing, Gambia
Digital Payments and Social Protection in Senegal with Albertine Bayombe Kabou and Anais Toungui
Project development phase. JPAL DigiFI grant. Location: Senegal.
Taxing High Income Earners in a Low Income Country with Pierre Bachas and Léo Czajka
Project development phase. Phase 1 World Bank report. Location: Senegal.
Returns to Investing in Property Tax Capacity in Dakar, Senegal with Denis Cogneau, Marc Gurgand, Victor Pouliquen and Bassirou Sarr
Analysis in progress. [Funding: EDI-CEGA, FID, J-PAL DigiFI] [AEA RCT Registration]
Dissertation and Pre-Doc
The (Un)Hidden Wealth of the City: Property Taxation under Weak Enforcement in Senegal
Property taxes are in theory easy to enforce in their simplest form due to their tangible tax base, and are considered an equitable means to raise revenue in low-income countries. In spite of these features, African countries, where cities are growing at an unprecedented pace are raising only 2 percent of fiscal revenue in property taxes, against around 9 percent in OECD countries, and this figure is at 0.3 percent in Senegal. Focusing on Dakar, the capital city where real estate has been buoyant over past decades, I document the extent and nature of the property tax gap. Using administrative and survey data, as well as satellite images and property valuation methods, I estimate that less than 20 percent of property owners are in the tax net, and that only 9 percent of tax potential is being collected. This weak performance is put into historical perspective using colonial archives. Finally, I compare the observed distribution of the tax burden with the theoretical one under full compliance, and find that weak enforcement leads to a tax profile that is more regressive than what is provided for in the legal framework. These results reinforce the justification for reform and modernization of the property tax management system.
[Working paper - 2021 Dissertation chapter]
[Pre-Doc] Natural Resources’ Impact on Government Revenues
Motivated by the fact that the taxation of natural resources is both crucial and particularly challenging for developing countries, this paper draws on a unique dataset to produce empirical evidence on two issues pertaining to the fiscal impact of oil. On a sample of 31 countries during the 2000s oil price boom, we first assess which country and sector characteristics are correlated with the effective tax on oil, i.e. the share of oil income collected by the government. Secondly, we test whether oil revenue evicts traditional tax revenues. We propose a new methodology to address this question and we conclude to the absence of such an eviction effect: we observe no effect of oil revenue on non-oil taxes through taxation channels, and linkages with the non-oil economy seem to yield additional non-oil tax revenues. These econometric analyses are complemented by six comparative case studies of countries observed before and after oil production begins. Historical, institutional and oil sector-specific information allows to account for differences observed in the evolution of the effective tax on oil and of non-oil taxes.