Rwanda is a country in a rush. Since the devastations of the genocide in 1994,
Rwanda’s new leaders have been exerting every effort and mobilizing every resource possible
to put the poor and conflict-ridden country onto a trajectory towards peace, and prosperity. To
this end, Rwanda has engaged in extensive state-building measures, revamping all branches of
government and restructuring their institutions, reworking its entire legal framework, and
reorganizing decision-making processes and standard operating procedures. In this context,
the decentralization of functional responsibilities and finances to lower level governments has
been pursued as one of the core public sector reforms.
State-building is a highly complex endeavor. Most notably it entails improving the
administrative, fiscal and institutional capacity of the state not only in order to provide for
efficiently functioning public sector operations, but also to ensure to carry out these
operations in service of and in agreement with its citizens (Braeutigam, 2008). The literature
offers various analytical perspectives and approaches to state-building. Braeutigam, Fjeldstad
and Moore (2008) elaborate on one of the central tenets of fiscal sociology which argues that
the necessity for a state to tax its citizens constitutes a strong incentive to engage in statebuilding.
This constructive effect of taxation on building state capacity operates through two
mechanisms: One refers to the revenue imperative creating an impetus for building
institutional capacity for tax extraction. The other refers to negotiations over taxation resulting
in a social contract between state and citizens (Braeutigam, 2008).
Another strand of literature (see e.g. Lemay-Hébert, 2009; Paine, 2010) argues that
state-building cannot be divorced from nation-building efforts as state-building requires that
state institutions reflect the norms and values of the community (or communities) that citizens
identify with (Paine, 2010). This congruency of norms and values creates the socio-political
cohesion necessary for a state to gain legitimacy (Lemay- Hébert, 2009).
3
According to key policy documents, the decentralization process in Rwanda is
intended to reform the public sector in order to improve the efficiency of public service
delivery and to empower citizens to take part in the development process (MINALOC, 2001).
Taken at face value, this reform thus seems to be fully aligned with the objectives of statebuilding
more generally and have the potential to contribute to Rwanda’s state-building
efforts in important ways.
For this reason, this dissertation will examine the role of decentralization on statebuilding
in Rwanda by looking at the relationship from three different angles. In particular,
the three essays outlined in this proposal will look at local taxation as an important aspect of
decentralized governance from the perspective of the local administration, at local taxation
from the perspective of the tax payer, and at decentralization policy more generally and its
relationship with national unity and nation-building. In investigating these questions, I will
loosely draw on ideas from the three theoretical mechanisms described above. More
specifically, the three papers will examine the following questions:
The first paper will look at the administrative and political economy issues around
local taxation and their effect on tax performance. It seeks to make sense of the efforts that
Rwandan local governments exert in strengthening local own revenue administration. To this
end, it will assess the technical and organizational approaches employed to implement a
system for local taxation. It will also explore the incentives and political motivations of
districts and central government actors to support the establishment of an effective local tax
administration. Getting a clearer picture of the interventions and the underlying motivations
regarding the implementation of the local revenue policy will help assess to what extent local
own revenue can serve as a driver for increasing local government autonomy and efficiency in
Rwanda’s decentralization process.
The second paper will examine issues around local tax payer compliance in Rwanda.
Specifically it will attempt to determine the nature of the incentives and disincentives for tax
4
payers to meet their tax liability. It will also examine the extent to which the local
governments are making use of their revenue systems to encourage tax payers to buy into an
exchange relationship where they pay taxes in exchange for receiving desired public services,
thereby positively affecting their perceptions of taxation and their attitudes towards the state.
In particular, I attempt to understand how these perceptions shape incentives for tax
compliance in Rwanda’s local taxation system and how they affect tax payers’ attitudes
towards local government and their perception of its legitimacy as a body of the state.
The third paper will look at decentralization more generally and assess the extent to
which it can support or weaken state-building efforts constructed around a single national
identity. Notably, it proposes to explore the potential goal conflict between decentralization
and nation-building in Rwanda, by studying the extent to which the implementation process
of the decentralization reform is able to accommodate the principle of national unity and
indivisibility, and whether it effectively promotes or impedes Rwanda’s nation-building
efforts. It also seeks to gain insights into the mechanisms through which decentralization can
shape people’s sense of belonging, and as a consequence affect the legitimacy of the state.