Skip to main content
SpringerLink
Log in

Local politics and the revenue collection effort in a developing country context: experiences from Ghana

  • Original Paper
  • Published:
SN Social Sciences Aims and scope Submit manuscript

Abstract

There is a renewed global emphasis on domestic revenue mobilisation for local development. This call came through the Sustainable Development Goals, which places enormous responsibility on local government bodies, especially in developing countries, to focus on local sources of revenue for development. Just like many local government bodies in most developing countries, Ghana’s Metropolitan, Municipal and District Assemblies (MMDAs) have had humongous challenges raising adequate revenue for local development. However, some assemblies have demonstrated more effectiveness in raising internally generated funds than others. Revenue variability studies on Ghana’s MMDAs are almost non-existent. This paper seeks to contribute to the role that local politics plays in different collection outcomes in the selected assemblies in Ghana. The study focuses on the selected urban Metropolitan and Municipal Assemblies in the Greater Accra region that share similar characteristics. With the fiscal exchange theory, local politics has shown to have had some influence on local revenue mobilisation outcomes. The exploratory-sequential mixed methods approach was adopted for the study. Through in-depth interviews of relevant local government officers and a survey of opinions of taxpayers in all four selected Assemblies, it was found that local politics have played significant roles in occasioning different revenue mobilisation outcomes in the selected Assemblies.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Data availability

The datasets generated during and/or analysed during the current study are available from the corresponding author upon reasonable request.

References

  • Aboagye PY, Hillbom E (2020) Tax bargaining, fiscal contracts, and fiscal capacity in Ghana: a long-term perspective. Afr Aff 00(00):1–26. https://doi.org/10.1093/afraf/adaa004

    Article  Google Scholar 

  • Adams S, Taabazuing J (2015) The promises and realities of Ghana’s decentralization: a case study from the Wenchi district of Ghana. J Contemp Afr Stud 33(1):88–104

    Article  Google Scholar 

  • Adusei-Asante K (2012) The state of Ghana’s local government system: the case of assembly members. Inkanyiso: J Humanit Soc Sci 4(2):101–110

  • Adu-Gyamfi E (2014) Effective revenue mobilisation by districts assemblies: a case study of Upper Denkyira East Municipal Assembly of Ghana. Public Policy Admin Rev 2(1):97–122

    Google Scholar 

  • Agbevade A (2020) The politics of actor involvement in local economic development in Ghana: empirical evidence from the Accra Metropolitan, Keta Municipal and Shai-Osudoku district assemblies. Afr Stud Dev 12(2):25

    Article  Google Scholar 

  • Agyapong A, Sanyare FN, Wedam EA (2022) Domestic revenue mobilization: institutional challenges in Ghana’s decentralization system. In: Democratic decentralization, local governance and sustainable development: Ghana’s experiences for policy and practice in developing countries. Springer International Publishing, Cham, pp 155–171

    Chapter  Google Scholar 

  • Ahwoi K (2010) Rethinking decentralization and local government in Ghana proposals for amendment

  • Akorsu PK (2015) An evaluation of the effectiveness of revenue mobilisation in the public sector of Ghana. Int J Econ Commerce Manag 3(1):1–16

    Google Scholar 

  • Akudugu JA, Oppong-Peprah E (2013) Local government revenue mobilisation and management: the case of Asante Akim South District Assembly, Ghana. J Public Admin Gov 3(2):98–120

    Google Scholar 

  • Ali M, Fjeldstad O, Sjursen IH (2014) To pay or not to pay? Citizens’ attitudes toward taxation in Kenya, Tanzania, Uganda, and South Africa. World Dev 64:828–842

    Article  Google Scholar 

  • Almn J, McClelland GH, Schulze WD (1992) Why do people pay taxes? J Public Econ 48(1):21–38

    Article  Google Scholar 

  • Altman N, Krzywinski M (2017) Points of significance: interpreting P values. Nat. Methods 14(3):213–215

  • Ameyaw B, Oppong A, Abruquah LA, Ashalley E (2016) Informal sector tax compliance issues and the causality nexus between taxation and economic growth: empirical evidence from Ghana. Mod Econ 7(12):1478–1497

    Article  Google Scholar 

  • Andersson P (2017) Essays on the politics of taxation. Statsvetenskapliga institutionen, Lund

    Google Scholar 

  • Annan-Prah EC, Andoh RPK (2023) Administrative capacity and local level development in metropolitan, municipal and district assemblies in Ghana: mediating role of resource capacity. Int J Public Sect Manag

  • Arauco VP, Pozo WJ (2023) 4 The political economy of mobilizing tax resources in Bolivia. In: Taxation and inequality in Latin America: new perspectives on political economy and tax regimes

    Google Scholar 

  • Armah-Attoh D, Awal M (2013) Tax administration in Ghana: perceived institutional challenges. Afrobarometer Briefing Paper 124(1):9

  • Aumeerun B, Jugurnath B, Soondrum H (2016) Tax evasion: empirical evidence from sub-saharan Africa. J Account Taxation 8(7):70–80

  • Awadari AC (2020) Donor fatigue phenomenon: trend and circumvention in Northern Ghana. Int J Financ Account Manag 1(4):191–198

    Google Scholar 

  • Awortwi N (2010) The past, present, and future of decentralisation in Africa: a comparative case study of local government development trajectories of Ghana and Uganda. Int J Public Adm 33(12–13):620–634

    Article  Google Scholar 

  • Awortwi N (2011) An unbreakable path? A comparative study of decentralization and local government development trajectories in Ghana and Uganda. Int Rev Admin Sci 77(2):347–377

    Article  Google Scholar 

  • Ayee JRA (1996) The measurement of decentralization: the Ghanaian experience, 1988–92. Afr Aff 31–50

  • Baldwin K (2016) The paradox of traditional chiefs in democratic Africa. Cambridge University Press

  • Barber M (2015) How to run a government: so that citizens benefit and taxpayers don’t go crazy. Penguin UK

    Google Scholar 

  • Barbier KB (2019) Community-based development in Africa. In: Economics for the Wilds. Routledge, pp 103–135

    Chapter  Google Scholar 

  • Bello-Bravo J (2015) Rural-urban migration: a path for empowering women through entrepreneurial activities in West Africa. J Glob Entrep Res 5:1–9

    Article  Google Scholar 

  • Boateng K, Afranie S, Amoah SK (2016) Social mobilisation in the midst of social change: the case of traditional authorities in Ghana. J Educ Soc Res 6(2):103

    Google Scholar 

  • Bodea C, LeBas A (2013) The origins of social contracts: attitudes toward taxation in urban Nigeria. Centre for the Study of African Economies, University of Oxford

  • Bratton M (2012) Citizen perceptions of local government responsiveness in sub-saharan Africa. World Dev 40(3):516–527

  • Brown RE, Mazur MJ (2003) IRS’s comprehensive approach to compliance measurement. Nat Tax J 56(3):689–700

    Article  Google Scholar 

  • Carpenter WS (1936) Politics: who gets what, when, how. By Harold D. Lasswell. (New York: Whittlesey House. 1936. Pp. ix, 264.). Am Political Sci 30(6):1174–1176

  • Carrión G (2020) The political economy of domestic resource mobilization in Nicaragua: changing state-citizen relations and social development. Springer International Publishing, pp 305–338

    Book  Google Scholar 

  • Castro L, Scartascini C (2015) Tax compliance and enforcement in the pampas evidence from a field experiment. J Econ Behav Organ 65–82

  • Chemouni B (2014) Explaining the design of the rwandan decentralization: elite vulnerability and the territorialrepartition of power. J East Afr 8(2):246–262

  • Cherrier C (2014) The politics of revenue mobilisation for social transfers in sub-Saharan Africa. In: 14th EADI general conference responsible development in a polycentric world–inequality, citizenship and the middle classes, Bonn, pp 23–26

    Google Scholar 

  • Chigwata T (2016) The role of traditional leaders in Zimbabwe: are they still relevant? Law Democracy Dev 20(1):69–90

  • Cockx L, Colen L, Weerdt JD, Paloma GY (2019) Urbanization as a driver of changing food demand in Africa: evidence from rural-urban migration in Tanzania. Publications Office of the European Union

    Google Scholar 

  • Creswell JW, Clark VLP (2017) Designing and conducting mixed methods research. Sage publications

    Google Scholar 

  • Crook RC (2017) Democratic decentralisation, clientelism and local taxation in Ghana. IDS Bull 48

  • D’Arcy M (2011) Why do citizens assent to pay tax? Legitimacy, taxation and the African state

  • Danquah M, Osei-Assibey E (2018) The extent and determinants of tax gap in the informal sector: evidence from Ghana. J Int Dev 30(6):992–1005

    Article  Google Scholar 

  • Darison AB (2011) Enhancing local government revenue mobilization through the use of information communication technology: a case-study of Accra metropolitan assembly. Doctoral dissertation

  • DESA UN (2018) Revision of world urbanization prospects. UN Department of Economic and Social Affairs, p 16

  • Devos K (2014) Tax compliance theory and the literature. In: Factors influencing individual taxpayer compliance behaviour, pp 13–65

    Chapter  Google Scholar 

  • Di John J (2011) Taxation, resource mobilisation, and state performance

  • Dick-Sagoe C (2012) Survey of literature of fiscal decentralization as a sustainable local development tool in Ghana. J Sustain Dev Africa 14(3):228–251

  • Dom B (2021) Impacts of austerity on Welsh Local Government funding: cuts to the bone?

  • Drummond P, Daal W, Srivastava N, Oliveira L (2012) Mobilizing revenue in Sub-Saharan Africa: empirical norms and key determinants

  • Dzansi J, Jensen A, Lagakos D, Otoo I, Telli H, Zindam C (2018) Survey of local government revenue mobilization capacity in Ghana, 2017: summary and policy implications. In: International growth centre project report S-33417-GHA-2

    Google Scholar 

  • Egbenya GRK (2010) The Effectiveness of decentralization policy in Ghana: a case study of komenda-edina-eguafo-abrim (KEEA) and abura-asebu-kwamankese (AAK) districts in Ghana. Afr J Pol Sci Int Relat 4(1):13

  • Fauziati P, Minovia AF, Muslim RY, Nasrah R (2020) The impact of tax knowledge on tax compliance case study in Kota Padang, Indonesia. J Adv Res Bus Manag Stud 2(1):22–30

    Google Scholar 

  • Fjeldstad OH (2006) Local revenue mobilization in urban settings in Africa. Chr. Michelsen Institute

    Google Scholar 

  • Fjeldstad OH, Moore M (2009) Revenue authorities and public authority in sub-Saharan Africa. J Mod Afr Stud 47(1):1–18

    Article  Google Scholar 

  • Fjeldstad OH, Schulz-Herzenberg C, Hoem Sjursen I (2012) People’s views of taxation in Africa: a review of research on determinants of tax compliance. Available at SSRN 2411424

  • Gadenne L (2017) Tax me, but spend wisely? Sources of public finance and government accountability. Am Econ J Appl Econ 274–314

  • Ghana Internal Revenue Act 2000 (Act 592)

  • Ghana National Decentralisation Action Plan 2015-2019: Accelerating decentralisation and local governance for national development

  • GSS (2014) 2010 Population and housing census: distrtict analytical report. Tema Metropolitan Assembly

  • Hickey S (2008) Conceptualising the politics of social protection in Africa. In: Social protection for the poor and poorest: concepts, policies and politics, pp 247–263

    Google Scholar 

  • Irvin RA, Stansbury J (2004) Citizen participation in decision making: is it worth the effort? Public Adm Rev 64(1):55–65

    Article  Google Scholar 

  • ISSER (2019) The state of the Ghanaian economy report. https://www.isser.ug.edu.gh/publications/the-state-of-the-ghanaian-economy. Accessed 02 Jan 2020

  • Keating M (2010) Government of Scotland: Public Policy Making after Devolution. Edinburgh University Press. https://doi.org/10.1007/s43545-024-00867-z

  • Kieyah J, Khaoya D (2017) Traditional institutions of the meru, pokot, and mijikenda communities in Kenya. In traditional institutions in contemporary african governance (pp. 108–120). Routledge

  • Kira AR (2017) An evaluation of governments’ initiatives in enhancing small taxpayers’ voluntary tax compliance in developing countries. Int J Acad Res Account Finance Manag Sci 7(1):253–267

    Google Scholar 

  • Knierzinger J (2010) The chiefs of development: local development and local government in Ghana. ÖFSE-Forum

    Google Scholar 

  • Kofele-Kale N (2011) Local governance under Cameroon’s decentralisation regime: is it all sound and fury signifying nothing? Commonw Law Bull 37(3):513–530

    Article  Google Scholar 

  • Krejcie RV, Morgan DW (1970) Determining sample size for research activities. Educ Psychol Meas 30(3):607–610

  • Lasswell HD (2017) Power and society: a framework for political inquiry. Routledge

    Book  Google Scholar 

  • Levi M (1989) Of rule and revenue, vol 13. University of California Press

    Google Scholar 

  • Levin KA (2006) Study design III: cross-sectional studies. Evid-Based Dent 7(1):24–25

  • Mahama C (2009) Local government and traditional authorities in Ghana: towards a more productive relationship. Commonw J Local Gov 4:7–25

    Google Scholar 

  • Mahama PY, Abdulai AG, Asamoah K (2023) Collective action and revenue generation: focus on selected metropolitan and municipal assemblies in Ghana. SN Soc Sci 3(8):117

    Article  Google Scholar 

  • March JG, Olsen JP (1983) The new institutionalism: organizational factors in political life. Am Pol Sci Rev 78(3):734–749

    Article  Google Scholar 

  • Mariwah S (2012) Institutional arrangements for managing solid waste in the shama-ahanta-east metropolis, Ghana. J Sustain Dev Africa 14(6):292–312

  • Masaki T (2018) The impact of intergovernmental transfers on local revenue generation in Sub-Saharan Africa: evidence from Tanzania. World Dev 106:173–186

    Article  Google Scholar 

  • Mascagni G, Moore M, McCluskey R (2014) Tax revenue mobilistation in developing countries: issues and challenges. European Union (Belgium)

  • McKee M, Siladke CA, Vossler CA (2018) Behavioural dynamics of tax compliance when taxpayer assistance services are available. Int Tax Public Finance 25:722–756

  • McLeod SA (2019) Z-Score: Definition, Calculation and Interpretation. Simply Psychology. https://www.simplypsychology.org/z-score.html

  • Meltsner AJ (2022) The politics of city revenue. University of California Press

    Google Scholar 

  • Mogues T, Benin S (2012) Do external grants to district governments discourage own revenue generation? A look at local public finance dynamics in ghana. World Dev 40(5):1054–1067

    Article  Google Scholar 

  • Moore M, Prichard W (2020) How can governments of low-income countries collect more tax revenue? Springer International Publishing, pp 109–138

    Google Scholar 

  • Ohemeng FL, Owusu FY (2015) Implementing a revenue authority model of tax administration in Ghana: an organizational learning perspective. Am Rev Public Adm 45(3):343–364

    Article  Google Scholar 

  • Okpeyo ET, Musah A, Gakpetor ED (2019) Determinants of tax compliance in Ghana. J Appl Account Tax 4(1):1–14

    Google Scholar 

  • Owusu G (2009) Internal boundaries and district administration: a challenge to decentralization and district development in Ghana. Geogr Ann B Hum Geogr 91(1):57–71

    Article  Google Scholar 

  • Peprah JA, Andoh FK, Avorkpo EA, Dafor KN, Afful Jr B, Obeng CK (2022) Compliance burden and tax gap among micro and small businesses: evidence from Ghana. Sage Open 12(4):21582440221126985

    Article  Google Scholar 

  • Puopiel F, Chimsi M (2015) Mobilising internally generated funds to finance development projects in Ghana’s northern region. Commonw J Local Gov (18):147–160

  • Pushkareva N (2021) Taxing times for development: tax and digital financial services in Sub-Saharan Africa. Finance Dev 1(3):33–64

    Google Scholar 

  • Quak EJ (2019) Taxation and accountability: how to improve the state-citizen social contract through taxation

  • Rakner L (2001) The politics of revenue mobilisation: explaining continuity in Namibian tax policies. In: Forum for development studies, vol 28, No. 1. Taylor & Francis Group, pp 125–145

    Google Scholar 

  • Rakodi C (2016) The urban challenge in Africa. In: Managing urban futures. Routledge, pp 63–86

    Google Scholar 

  • Resnick D (2017) Democracy, decentralization, and district proliferation: the case of Ghana. Political Geogr 59:47–60

    Article  Google Scholar 

  • Schervish MJ (1996) P values: what they are and what they are not. Am Stat 50(3):203–206

  • Stone (1989) Regime Politics: Governing Atlanta, 1946-1988. University Press of Kansas

  • Tee E, Boadi L, Opoku R (2016) The effect of tax payment on the performance of SMEs: the case of selected SMEs in Ga West municipal assembly. Eur J Bus Manag 8(20)

  • Torgler B (2007) Tax compliance and tax morale: a theoretical and empirical analysis. Edward Elgar Publishing

    Book  Google Scholar 

  • Torgler B, Schneider F (2007) What shapes attitudes toward paying taxes? Evidence from multicultural European countries. Soc Sci Q 88(2):443–470

    Article  Google Scholar 

  • Utting P, Van Dijk N, Matheï MA (2014) Social and solidarity economy: is there a new economy in the making? (No. 10). UNRISD Occasional Paper: Potential and Limits of Social and Solidarity Economy

    Google Scholar 

  • Van den Boogaard V, Prichard W, Beach R, Mohiuddin F (2020) Strengthening tax-accountability links: fiscal transparency and taxpayer engagement in Ghana and Sierra Leone

  • Vo DH (2010) The economics of fiscal decentralization. J Econ Surv 24(4):657–679

  • von Haldenwang C, von Schiller A (2016) The politics of taxation: introduction to the special section. J Dev Stud 52(12):1685–1688

    Article  Google Scholar 

  • Wilfahrt M (2018) The politics of local government performance: elite cohesion and cross-village constraints in decentralized Senegal. World Dev 103:149–161

    Article  Google Scholar 

  • Yankson PW (2008) Decentralisation and poverty reduction in the Gomoa District of Ghana. Norsk Geografisk Tidsskrift (Nor J Geogr) 62(3):230–240

    Article  Google Scholar 

  • Yin RK (2018) Case study research and applications. Sage

    Google Scholar 

Download references

Funding

No funding was received to assist with the preparation of this manuscript.

Author information

Authors and Affiliations

  1. Faculty of Management Studies, University of Professional Studies, Accra (UPSA), P.O. Box LG 149, Accra, Ghana

    Patrick Yin Mahama

  2. University of Ghana Business School, Accra, Ghana

    Abdul-Gafaru Abdulai & Kwame Asamoah

Authors
  1. Patrick Yin Mahama
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Abdul-Gafaru Abdulai
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Kwame Asamoah
    View author publications

    You can also search for this author in PubMed Google Scholar

Contributions

Professor A.-G.A. was the lead supervisor and was assisted by Professor K.A., both of the University of Ghana Business School. Both Professors supervised and made critical contributions to every part of the work. As stated in the abstract, this paper is part of broader research on local government financing and revenue mobilisation. Their contributions helped shape the paper in its entirety from the introduction to the literature review, methodology, discussion and conclusion.

Corresponding author

Correspondence to Patrick Yin Mahama.

Ethics declarations

Ethical approval

The study obtained approval from the University of Ghana’s Ethical Committee for the Humanities (ECH). The research complied with the ethical requirements as approved by the ECH (ECH 061/17-18).

Informed consent

Permission was obtained from all four Metropolitan and Municipal Assemblies before the data were collected. Additionally, individual participants’ consent was verbally solicited before their participation. Participants were also assured that they could truncate the process at any point where they felt uncomfortable with the information they provided.

Competing interests

The authors have no competing interests to declare that are relevant to the content of this article.

Rights and permissions

Springer Nature or its licensor (e.g. a society or other partner) holds exclusive rights to this article under a publishing agreement with the author(s) or other rightsholder(s); author self-archiving of the accepted manuscript version of this article is solely governed by the terms of such publishing agreement and applicable law.

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Mahama, P., Abdulai, AG. & Asamoah, K. Local politics and the revenue collection effort in a developing country context: experiences from Ghana. SN Soc Sci 4, 72 (2024). https://doi.org/10.1007/s43545-024-00867-z

Download citation

  • Received:

  • Accepted:

  • Published:

  • DOI: https://doi.org/10.1007/s43545-024-00867-z

Keywords

Search

Navigation