Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo

Last registered on July 28, 2020

Pre-Trial

Trial Information

General Information

Title
Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo
RCT ID
AEARCTR-0004394
Initial registration date
June 28, 2019
Last updated
July 28, 2020, 1:23 AM EDT

Locations

Region

Primary Investigator

Affiliation
World Bank

Other Primary Investigator(s)

PI Affiliation
University of Wisconsin-Madison

Additional Trial Information

Status
Completed
Start date
2014-11-01
End date
2015-12-23
Secondary IDs
Abstract
The often observed wedge between statutory policies and on-the-ground enforcement practices in low-income countries for the taxation of small, informal firms may stem from an asymmetry of information about the law. We test this hypothesis in a randomized controlled trial in Lome, Togo by training firms about the tax code and assessing the effect on their tax participation and economic activities. We find that tax participation decreased, driven bylow-revenue firms, and their economic activities expanded. Overall tax revenues increased, suggesting that aggressive taxation under asymmetric civicinformation is likely regressive and counterproductive for firms’ activities andgovernment revenues.
External Link(s)

Registration Citation

Citation
Blimpo, Moussa and Paul Castaneda Dower. 2020. "Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo." AEA RCT Registry. July 28. https://doi.org/10.1257/rct.4394-2.1
Former Citation
Blimpo, Moussa, Moussa Blimpo and Paul Castaneda Dower. 2020. "Asymmetry in Civic Information: An Experiment on Tax Participation among Small and Informal Firms in Togo." AEA RCT Registry. July 28. https://www.socialscienceregistry.org/trials/4394/history/73279
Experimental Details

Interventions

Intervention(s)
The intervention consisted of the provision of information and training about
tax obligations and benefits of taxation to firm owners and society at large. The information included was based on the tax code as well as our interviews with senior tax officials concerning information that they would like these firms to know. Along with information about their tax obligations, the treatment also consisted of what taxes pay for and the cost of these services.
Intervention Start Date
2015-08-01
Intervention End Date
2015-09-15

Primary Outcomes

Primary Outcomes (end points)
1. Tax compliance
2. Attitudes toward taxation
Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
Many of the firms in the informal sector do not have physical addresses. Additionally, Togo does not have a recent firm census that could serve as a sampling frame. We resorted to a sampling method used by the Afrobarometer surveys, which uses a well-designed shoe leather and sampling on the ground. We used the census tracts as enumeration areas. For each enumeration areas, we randomly select a starting point on the map. Four enumerators then go to the nearest junction to the starting point
and choose five businesses in each of the four directions by counting businesses that they encounter on both sides of the streets and selecting every fifth. This first database is then used for the random assignment to the treatment or the control group.
Experimental Design Details
Randomization Method
The randomization was in office by computer following the baseline data collection.
Randomization Unit
The unit of randomization is the firm
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
424 firms
Sample size: planned number of observations
424 firm owners
Sample size (or number of clusters) by treatment arms
212 firms owners in the treatment group and 212 firm owners in the control group
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
IRB

Institutional Review Boards (IRBs)

IRB Name
IRB Approval Date
IRB Approval Number

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials