Do Aid or Oil Revenue Windfalls Really Undermine Accountability? An Experiment in Indonesia

It is widely believed that natural resource wealth, foreign aid and other types of windfall revenue increase corruption and undermine accountability. A dominant claim is that windfalls free politicians from the need to tax, resulting in a more politically quiescent population. Yet, there is surprisingly little evidence to substantiate not only whether taxation has this effect but also why. Paler sheds light on these questions through novel experiments in public awareness campaigns in Indonesia. She finds that citizens are indeed more motivated to monitor and punish governments when they pay taxes.

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