This thesis is about taxation and accountability in low-income developing countries. It studies whether, how and under what conditions taxation features in state-society accountability relations in Senegal.

For several decades now, taxation has featured centrally on the agenda of development partners. Already in the 1990s, tax reforms to modernise tax administrations and to simplify tax regimes were implemented under the auspices of IMF and the World Bank. In the 2000s, taxation became linked to the good governance agenda, and in 2015, the Addis Action Agenda made taxation an integral part of the effort to reach the Sustainable Development Goals by 2030. The road towards this central position of taxation on the international development agenda has largely been paved by a body of research on the links between taxation, governance and fiscal contracts. Building on state-building narratives of Medieval Western Europe, where bargaining between rulers and populations over taxation led to demands of political influence, the belief is that taxing and being taxed can forge an interdependency between states and the populations in low-income, developing countries, which will, in turn, lead to more accountable governance. The expectation is that on the societal side, the population is expected to engage politically and to demand accountability when dissatisfied with the state’s collection and use of tax revenues and to use their role as taxpayers as leverage when interacting with the state. On the state’s part, an interest in lowering political and administrative costs of imposing and increasing taxation provides an incentive to concede to these societal demands. The expectation (based on this stylised narrative) is that, over time, the exchange of revenue for public goods and political influence will develop a fiscal contract between state and society.

In Senegal, taxation is relatively broad-based, there is a certain level of public service provision, and with a stable democracy, free and fair elections as well as institutionalised consultation of societal actors, political influence and inclusion has been the rule, making Senegal an exception. Based on these circumstances, it could seem that there is a fiscal contract in Senegal. However, this thesis finds that despite relatively broad-based taxation in Senegal, taxation only plays a limited role in state-society accountability relations. To understand this puzzling finding, the thesis engages critically with this fiscal contract theory both theoretically and empirically.

Theoretically, the thesis argues that the puzzle is partly a result of a poor conceptual foundation of the fiscal contract theory. Based on a comprehensive literature review, this thesis revisits the fiscal contract concept and identifies two clusters of fiscal contract understandings in the literature. Based on the literature and on observations made during fieldwork, two fiscal contract concepts are developed: the exchange-based fiscal contract, defined as a reciprocal exchange-based fiscal relationship between the state and a group of taxpayers; and the norm-based fiscal social contract, defined as is the norm-based, complex fiscal relationship between state and society. The two concepts constitute an important contribution to the fiscal contract theory as they constitute a first step towards advancing the conceptual and theoretical foundation of the literature on taxation, governance and fiscal contracts.

Based on extensive fieldwork, interview data and a survey with informal, economic actors in Dakar, the thesis studied twelve cases of social accountability, defined as societal actors’ engagement with state actors over demands for accountability. The cases were identified in interviews, media searches and reports published by three horizontal accountability institutions including Senegal’s anti-corruption agency, and they include economic and social sectors, different kinds of societal actors and revolve around different matters. For example, one case concerns the breakdown of Senegal’s only radiotherapy machine in January 2016; another the announced closure of the private schools, Yavuz Selim, in July 2016; and a third concerns the fishing agreement between EU and Senegal entered in 2014. In these cases, societal actors engaged state actors, demanding respectively that a new machine was bought promptly, that the state revoke the decision to close the schools, and that the state should have included the societal actors in the negotiation of the new fishing agreement. An examination of the arguments applied to substantiate these demands shows that societal actors apply tax-related arguments in only three of the twelve cases. Exploring how and under what conditions taxation does or does not feature across the twelve cases, it was found that taxation tends to feature in a different way than expected by the fiscal contract theory, and importantly, how and whether taxation features is conditioned by the local context including social norms, capacity constraints, existing accountabilities and other features of state-society accountability relations.

Eventually applying the two newly developed fiscal contract concepts to the empirical findings, the thesis argues that the limited role of taxation in state-society accountability relations in Senegal can be understood by acknowledging the importance of norms and expectations. While relatively broad-based taxation, public service provision and political inclusion indicate that there is an exchange-based fiscal contract in Senegal, the empirical findings show that the norm-based fiscal social contract is not about tax; taxation is not central to societal actors’ expectations and the norms of what public services the state provides to whom. Instead, these expectations are shaped by contextual conditions, specifically, social norms and the existing accountabilities, elections and personalised state-society accountability relations.

Both the empirical and the theoretical contributions underpin the overall argument that emerges from this thesis: whether and how taxation features in state-society accountability relations should be understood by taking into consideration contextual conditions that shape state-society accountability relations, the contextualised meaning of taxation and, hence, the actual and potential role of taxation.

The contributions of this thesis are pertinent for the literature on taxation, governance and fiscal contracts and for practitioners in international development who are intrigued by the proposition that taxation can spur the development of a fiscal contract. The hope is that the revised conceptual foundation as well as the empirical findings of this thesis will provide for a more nuanced narrative about the governance effect of taxation. The findings should prompt researchers and practitioners to pay careful attention to the contextual conditions that influence outcomes of programmes and projects meant to promote taxation as a positive link between state and societies and a facilitator of accountable governance.