In criticizing the paper for failing to consider historical or current differences among populations in the north vs the south of Nigeria today, I think a couple of the commenters seem to really miss the point that the paper looked *only* at the populations just above and just below the temporary administrative boundary line.

People may be overly eager to generalize simplistic policy prescriptions from economics research (i.e. aha! If this paper shows a small effect of taxation on governance in a very specific area in Nigeria, we should redirect all development funds towards implementing poll taxes!). But this is not necessarily the fault of the research itself, and while any of you may agree or disagree with the paper’s methods or conclusions, I don’t think there’s anything wrong with the idea that this narrowly focused paper (which in fairness does rely on both statistical analysis and the historical record) could provide one small but valuable slice of evidence towards one of those fundamental–or “universal”– concepts that we can say tends to hold more often than not, i.e. that direct taxation can help build bureaucratic capacity, or that institutional norms can persist over time in surprising ways.

Note that Ranil Dissanayake over at Aid Thoughts has an interesting post on what he thinks are the limitations of this type of study. He uses my summary of Berger’s paper to illustrate his point that “economists tend too much towards isolation of specific issues (and this tends to lead to or benefit from reductionism).”

“It’s just so interesting that in over a century, none of the people living a few miles south of the border realized how much happier they could make themselves and their children just by moving up the road a bit. Instead, they stayed put, generation after generation, and then complained about their plight to Afrobarometer and let their kids be deprived of vaccine. It’s a quaint and curious thing, how silly we humans can sometimes be.”

Unfortunate, yes, but silly? That would be a conclusion based on an assumption that people know and understand everything about the choices in front of them, and are able to make a choice.

As some others have suggested, I think the evidence is rather oversimplified, but the conclusion is certainly interesting and based on some sound theory.

As she said, the tax realities today certainly tell a different story.

Nevertheless, I’ll play devil’s advocate and offer a defense for the writer. The influence of resource allocations from the central government, the effect of which has been likened to aid flows by many competent development economists, might have skewed the observable results today.

Still, although I think using the arbitrary divide has problems (and ignores other contributory effects such as the British’s traditional preference for northerners; direct rule in the north and indirect rule in the south), the conclusion on taxes seems reasonable. The two states with the highest IGRs in Nigeria today (Lagos in the south and Sokoto in the North) are states with marginally better institutions.

However, I think this raises important questions about the causal relationship between taxes and good governance. Does good governance result in better and increased taxation or does taxation require good governance?

I hope the author clears this up in the final study

This is the most interesting phrase of the whole post, really. It’s just so interesting that in over a century, none of the people living a few miles south of the border realized how much happier they could make themselves and their children just by moving up the road a bit. Instead, they stayed put, generation after generation, and then complained about their plight to Afrobarometer and let their kids be deprived of vaccine. It’s a quaint and curious thing, how silly we humans can sometimes be.

We had a mayor of a city (Puerto Cortés) decentralize the aid and he got i.e. 3 miles of sidewalks for every mile built by a Central Government contractor. The idea of decentralizing governments should be one of the focuses of aid agencies as well as their own division of labour signed in Monterrey, Rome, Paris and Accra.

None of the initiatives is fully realized. It is more a pamphlet of good intentions.