Spillovers in State Capacity Building: Evidence from the Digitization of Land Records in Pakistan
Shan Aman-Rana, Clement Minaudier
American Economic Review · 2026 · Volume 116 · Issue 4
Abstract
Digitization reforms have been hailed as an effective way of strengthening state capacity. However, digitization can also fundamentally reshape the organization of bureaucracies. Using a unique administrative dataset on agricultural taxation and surveys of local bureaucrats from Punjab, Pakistan, we show that digitization reforms can have unintended consequences for state capacity. We exploit the staggered rollout of the digitization of land records in Punjab to show that digitization had a negative effect on tax collection. The fall in taxes was not due to a decrease in the tax base. Instead, digitization affected the bureaucrats' capacity to collect taxes.
Keywords
Bureaucracy, Administrative Processes in Public Organizations, Corruption, Structure, Scope, and Performance of Government, State and Local Taxation, Subsidies, and Revenue, Microeconomic Analyses of Economic Development, Formal and Informal Sectors, Shadow Economy, Institutional Arrangements
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