Sanitation and property tax compliance: Analyzing the social contract in Brazil

Abstract

This paper investigates the role that sanitation plays in upholding the social contract, whereby citizens pay taxes in exchange for governments providing goods and services. We study the case of Manaus, Brazil, where sewer connections vary considerably across the city and property taxes are calculated in a presumptive manner that does not account for a household's access to sanitation. We find that households with access to the city sewer system are significantly more likely to pay their property tax, relative to households that only have access to latrines or lack access to improved sanitation entirely. Our evidence is consistent with a role for the social contract in this decision, as households with sewer systems are more likely to have positive attitudes towards the municipal government.

Publisher

Elsevier

Publication Date

1-1-2023

Publication Title

Journal of Development Economics

Department

Economics

Document Type

Article

DOI

https://dx.doi.org/10.1016/j.jdeveco.2022.102954

Keywords

Sanitation, Property tax, Social contract, Tax compliance, Brazil

Language

English

Format

text

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