Cities in the Global South are growing rapidly and need to generate more revenue to fund critical public services. Yet revenue-raising efforts by local governments – and property taxes in particular – are frequently ineffective, inequitable and unaccountable.
A new applied research initiative that aims to improve public services and governance in lower-income countries through more effective local taxation has attracted more than $4 million from funders including the Bill & Melinda Gates Foundation and the French Ministry of Economics, Finance and Recovery.
Based at the Munk School of Global Affairs and Public Policy at the University of Toronto (U of T), the Local Government Revenue Initiative (LoGRI) is developing policy-relevant research and tools to help local governments in sub-Saharan Africa and South Asia collect more local revenue, more equitably and fairly, and in ways that promote trust, transparency and accountability. LoGRI is an initiative of the International Centre for Tax and Development (ICTD), a leading global policy research network dedicated to improving the quality of tax policy and administration in lower-income countries.
“Our goal is to improve people’s lives by helping local governments raise the revenue they need to provide better local public services and strengthen local governance,” said Wilson Prichard, an associate professor at the Munk School and the Department of Political Science at U of T, and chief executive officer of the ICTD. “We are especially focused on supporting stronger property taxes, which can provide the stable source of income cities need to provide key services like sanitation, critical small-scale infrastructure and environmental services. Yet in practice property taxes are the least effectively collected major tax in lower-income countries due to significant barriers such as incomplete property tax rolls, inconsistent ways of valuing properties, and mistrust and low compliance among taxpayers.”
LoGRI works at the intersection of research and practice to overcome both technical and political challenges barriers to reform and support the construction of more effective systems of local revenue raising. This includes supporting research into the challenges of reform, building research-informed tools and resources to support those reform, and partnering with local governments and international development agencies on property tax reform programs. It extends and expands the previous work of the African Property Tax Initiative (APTI), which counts among its achievements a highly successful pilot project in Freetown, Sierra Leone. That project tested a fairer, simpler and more consistent way of valuing properties in lower-capacity environments, led the design of a new IT system for property tax administration, support the introduction of automated payments at bank and introduced and led a process of participatory budgeting for allocating a share of property tax revenues.
LoGRI has attracted support from the Bill & Melinda Gates Foundation, the French Ministry of Economics, Finance and Recovery, and German Development Cooperation implemented by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. Several international development agencies have already contracted LoGRI to provide property tax reform expertise for their country programs, and LoGRI is in discussions with additional donors to further expand the initiative.
“One of the exciting things about LoGRI is that it bridges the gap between traditional academic research, policy and practice,” said Dr. Titilola Akindeinde, executive director of LoGRI. “Our research is informing more effective approaches to property tax administration, while partnering with local governments across multiple countries to design and pilot reform programs provides unique insights and experience that we can incorporate into our research. We believe this mutually reinforcing approach will enable us to develop robust tools and resources that will demonstrably improve property tax systems and quality of life in lower-income countries.”
Key to LoGRI’s success is engaging on its project teams local tax experts and researchers to ensure its findings reflect a deep understanding of the complex legal, political and social contexts in the countries where it works. LoGRI is focusing initially on both francophone and anglophone countries in sub-Saharan Africa, with future plans to engage in south Asia. Projects are already planned in Zambia, Cameroon, Sierra Leone and Malawi, with more expected to be developed as LoGRI expands its networks.
“LoGRI is part of the Munk School’s strategy to shape global conversations about major challenges of the future of democratic and democratizing societies,” said Peter Loewen, director of the Munk School and a professor at both the Munk School and the Department of Political Science. “As many countries grapple with uneven economic growth, rapid increases in population, poverty and inequality, we see a tremendous opportunity to learn from and collaborate with partners in these regions to address these pressing issues through better governance. We also look forward to deepening our engagement and networks in Africa.”
This article was original posted on Munk School of Global Affairs & Public Policy (University of Toronto) website, April 7, 2022.