Sub-Saharan African (SSA) countries face limited capacity to enforce tax payments combined with various obstacles that reduce tax compliance. Domestic revenues need to be mobilized to finance growing needs demanded by population growth, rising debt levels and declining development aid, often amidst widespread tax evasion, corruption and weak institutions. This paper examines the scope of fairly inexpensive text message “nudges” to improve voluntary compliance and raise tax revenue in a large and diverse East African economy, Tanzania. Six different behavioural messages were sent monthly to a randomized sample of income taxpayers in December 2023 – June 2024. Results confirmed by extensive robustness checks show little if any effect on taxpayer activity or taxes paid. In the absence of other changes, simple behavioral nudges in the form of text messages appear to have no impact on tax compliance.

We study how marginal effective tax rates of means-tested social welfare programs affect labor supply in the formal and informal sector. In a conjoint experiment, German welfare recipients report which jobs they might accept under different policy scenarios, varied in a between-subjects treatment design. We find that in addition to their negative effect on labor supply in the formal sector, higher transfer withdrawal rates increase the probability that job offers in the informal sector are accepted. These results provide novel evidence on the adverse implications of high transfer withdrawal rates and highlight the need for reform initiatives aiming at stronger labor supply incentives.

In a nationally representative online survey experiment with 4,000 respondents in Germany, we study how inflation narratives shape beliefs about the distributional consequences of inflation and attitudes toward mitigating policies. We first elicit respondents’ top-of-mind narratives for the recent surge in inflation using an open-ended question.We find that respondents predominantly attribute recent inflation to the war in Ukraine and to supply-side shocks. Participants are then randomly exposed to one of three narratives emphasizing either pent-up demand, the energy price crisis, or corporate price-gouging. In the control group, participants perceive lower income households as well as small and medium-sized firms to be disproportionately burdened. Exposure to the price-gouging narrative shifts beliefs about the distributional impact of inflation further toward lower income households and small and medium-sized firms, especially among left-leaning respondents. In contrast, policy preferences are largely inelastic to the treatments on average, except for right-leaning respondents, almost closing the baseline partisan gap.

In several cases secessionism goes together with violence. This paper uses a dynamic model to discuss the incentives of moderates and extremists, both agitating for independence. The extremists are willing to conduct terror and I argue that there are two types of extremists, those who are willing to compromise, and those who are not. In the equilibrium of the model, the moderates have a larger incentive to suppress terror and the extremists who are willing to compromise have smaller incentives to conduct terror when the probability of reaching an agreement is higher. The extremists who are not willing to compromise, however, have larger incentives to conduct terror when the probability of reaching an agreement is high.