In this paper, we provide evidence on how the provision of social infrastructure such as reliable
electricity can be leveraged to increase taxation in developing countries, particularly sub-Saharan
Africa (SSA). First, using comprehensive data from the latest round of the Afrobarometer survey, we
estimate, via the instrumental variable approach, the effect of access and reliability of electricity on
tax compliance attitudes of citizens in 36 SSA countries. Evidence from the paper shows a significant
positive effect of electrification on tax compliance attitudes with potentially strong externalities.
Also, we find that reliability of supply is crucial in explaining the impact of electricity access on
attitudes toward taxes. Second, we provide suggestive evidence on national identity as one channel
driving this impact. Access to social amenities such as electricity induces a sense of national identity
among citizens, thereby incentivizing them to contribute, through taxes, toward the functioning of
the state. Third, using data from the most recent World Bank Enterprise Surveys and under
conservative assumptions, we estimate that countries in the region could in total generate
additional tax revenues of more than $9.5 billion (4.3% of total tax revenue) per annum solely by
resolving issues related to electricity shortages. Put together; we conclude that the financial returns
associated with public investments toward improving access and reliability of electricity are
substantial and could be harnessed to augment the financing gap in the sector.
