Besley (2021), “Reciprocity and the State”

Timothy Besley, “Reciprocity and the State.” LSE Public Policy Review 2(1): 1-10, 2021. 

• "Reciprocal obligation lies at the heart of state-citizen relations [p. 1]." We can see this as the state tries to grapple with handling COVID.

• How can a society build reciprocity, which is (often) a sort of informal norm or institution?

• Government sovereignty makes it hard for for the state to commit to its future conduct – it could always reverse course, even if the citizenry is relying on earlier promises (such as pension payments). 

• Incidentally, the social contract theorists (Hobbes, Locke, Rousseau) all invoke reciprocity between the governed and the governors.

• Two elements that can build confidence in governments are (1) constraints on executive power and (2) open competition for leaders (elections).

• "Reciprocity kicks in when states deliver collective goods for citizens and, in exchange, when citizens offer their support, whether by paying taxes, volunteering for military duty, or obeying the law. However, their willingness to do so in the long-term is contingent on state behaviour [p. 5]."

• Taxes and social insurance are two areas where we can apply more concretely general considerations about reciprocity.

• The extent to which citizens believe that it is OK to cheat on their taxes varies quite a bit from country to country. People who trust their government, and believe that taxes are used for the social good, have higher tax morale. 

• To bolster reciprocity, we might want to discourage tax avoidance (which is legal) along with tax evasion (which is illegal) – both can undermine tax morale.

• Social insurance, by sharing risks, brings broad public benefits. Universality helps to promote "quasi-voluntary compliance" that more targeted programs might put at risk.