Social Compact: Urban Services and Taxes


The social compact between citizen and state – whereby a citizen pays taxes and receives (public) goods and services – is a critical link in the development process. This link is especially salient in the context of local governments and a significant metric on which they are judged. However, if citizens perceive little benefit from their tax payments, or local services are disconnected from local decision-making, this link can be broken. This can create a vicious cycle where citizens do not receive high quality services because resources are limited by low levels of local tax revenue, and the low quality of services leads to a low willingness to pay taxes, as well as a broader lack of trust in the state.

The study seeks to examine these issues by introducing a menu of reforms that strengthen the link between the provision of local urban services and local property tax collection in urban Pakistan.

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Principal Investigators

Dr. Asim Khwaja, Harvard University
Mehwish Shaukat
Dr. Adnan Qadir Khan, London School of Economics
Benjamin Olken, Massachusetts Institute of Technology

Partners and Funders

Punjab Local Government Department
Punjab Excise and Taxation Department

Project Period

2016 – Ongoing