Publication

The focus of this Policy Note is on what the push for domestic resource mobilization and taxation implies for aid donors, and why it is important for them to place these issues in a wide and largely political framework of social contracts. It has been argued that aid donors should focus more on supporting low-income countries to broaden their tax base and raise overall taxation. Besides increasing revenue, this has also a political objective. When citizens are taxed without excessive coercion, taxation can contribute considerably to improved governance and accountability, and to state building.