State Legitimacy, Tax Reform and the Provision of Basic Services

Abstract

This chapter argues that basic social services on an expanded scale, financed by increased domestic tax revenue, are important in preventing a civil conflict or CHE, or its recurrence. It first outlines a general framework to analyse civil conflicts in LDCs, indicating the role of fiscal policy in mitigating CHEs, and then examines Ethiopia since the fall of Haile Selassie, to see how it fits into the general framework. Finally, the chapter explores the broader implications of a relationship between provision of basic social services, financed by a reformed tax system, and the restoration of political legitimacy.