Taxation, expenditure, and accountability: Lessons from Namibia

Abstract

This article discusses the relationship between taxation, expenditure, and accountability. The point of departure is Moore's argument that the lower the dependence of governments on 'earned income' - income from taxes paid by citizens, rather than from aid and mineral rents - the lower accountability of states to citizens. Reciprocity through services to citizens is seen as an indicator for 'earnedness'. The arguments are discussed for the case of Namibia. This country is characterised by a high degree of dependence on aid and taxes on international trade - in other words, low 'earned' taxes. This contrasts with high expenditures and a system of accountability and seems to contradict Moore. However, a closer look by taxpayer group, gives a more differentiated picture. Expenditure patterns show that benefits are compromised by inefficiencies and are still biased towards the better-off. The system of accountability is also more used by this group.