Applying rigorous impact evaluation in GIZ governance programmes, Mozambique

The RIE focuses on the process of revenue mobilization, and particularly on the bill delivery. As the steps in revenue collection are interlinked it was possible to use the knowledge gained from the experiment, beyond its insights on bill delivery, to learn about how the previous steps work and, to a certain degree, test the effectiveness of the GIZ programme. The design of the tax letter experiment was as follows. All registered taxpayers for the Municipal Property Tax in two partner municipalities of the GIZ programme (Vilankulo and Dondo) were randomly assigned into one of three groups receiving slightly different tax notification letter. The basic composition of the letter was the same. Only a part of it was used to place different messages. One group received a letter with a positive framing, in which the local government informed them about what the revenue generated at the local level had been used for. The second group received a letter explaining clearly and prominently the legal consequences of not paying (negative framing). Finally, in the letter for the control group, a logo of the city or a very general slogan that was commonly used by the municipal administration was added to the formal letter. Two results of the RIE appear particularly relevant. First, compared to those who did not receive the notification letter, the probability of paying increased by around 25% among those receiving a letter. Second, positive framings appeared to be particularly promising in increasing compliance by individuals, while negative framings seemed to work better to motivate enterprises. In fact, positive framings backfired when used towards enterprises.