Perceptions of Meritocratic Recruitment and Willingness to Pay Taxes.

(With Maria Nagawa). Working paper.

Recommended citation: Taxes are critical to building state capacity, promoting growth, and maintaining the welfare state. However, many developing countries struggle to ensure tax compliance and shore up their tax revenues. The literature outlines several reasons: low levels of voluntary tax compliance, large informal sectors. and limited state capacity to collect taxes. However, this literature does not sufficiently address how citizens' perceptions of the state might impact their willingness to pay taxes. In this paper, we examine how citizen perceptions of recruitment and promotion practices in government agencies affect their willingness to pay taxes. Because nepotism and patronage signal corruption, particularistic, and poor service delivery, we expect citizens who perceive higher levels of non-meritocratic practices in the state apparatus to be less willing to pay taxes. Furthermore, we expect that administrative units where citizens perceive higher levels of non-meritocratic practices collect lower tax revenues. We will test our argument using data from two sources. First, we will rely on original data from a household survey conducted in Guatemala in the summer of 2022 (n=1,500). Our second source of data is administrative. We rely municipal tax collection data collected by the Guatemalan Ministry of Finance in 2022 for the municipalities in our sample.