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Is a government that relies on tax revenue, as opposed to natural resources or foreign aid, more likely to be accountable to its citizens? Have government efforts to raise taxes in Ghana produced successful demands for greater accountability? This paper examines the evolution and political dynamics of Ghana's central government tax system. It finds that taxation has often catalysed demands for greater accountability, but that outcomes have varied. State-society bargaining over taxation seems to be shaped by the broader state of politics, the role of elites, the mobilising capacity of civil society, the motives for the tax increase and the type of tax in question.

At the beginning of the 1980s the Ghanaian state and economy were in crisis. Since 1983, Ghana has experienced the most dramatic and prolonged improvement in tax collection of any country in sub-Saharan Africa. It is an ideal candidate for observing political responses to taxation.

Evidence from Ghana shows that the relationship between taxation and accountability varies dramatically based contingent factors. These include: the broader state of politics, the role of elites, the mobilising capacity of civil society, motives for the tax increase and the type of tax in question.

• In the early 1980s, the Provisional National Defence Council (PNDC) was strongly entrenched in power. The expansion of taxation was dramatic and faced little overt public opposition.
• Tax protests by small traders were among the first signs of popular resistance to the PNDC. Progressive governments have only been able to pass new tax laws by earmarking funds for popular public spending programmes.
• Two important political moments for Ghana's first National Defence Council (NDC) government centred on taxation: the first bill rejected by parliament and the first bill repealed due to public opposition. There are other instances where tax conflicts have been a driver of significant political processes.
• Conflicts over taxation have catalysed the formation or strengthening of important civil society bodies in Ghana. The inability of the NDC government in the late 1990s to raise revenue in the face of public opposition was crucial in reinforcing its electoral loss in 2000.
• The election of Ghana's New Patriotic Party (NPP) brought with it vast public goodwill among a population eager for change. The government was able to pursue dramatic increases in public revenue generation.

The example of Ghana shows that the dynamics surrounding taxation are profoundly linked to the state of politics more generally. The challenge of raising tax revenue has forced processes of implicit and explicit bargaining between state and society. This has been an important factor in causing political change.

• In the example of Ghana, public goodwill provided the support necessary for increases in taxes. But many argue that public goodwill virtually eliminated the critical role of civil society in overseeing government actions, with consequences for accountability.
• Earmarking funds for particular purposes can give the appearance of accountability. But actual accountability in such scenarios is less certain, and relies on the continued oversight of citizen groups.
• Public mobilisation is frequently mediated by elite political forces. This casts doubt on the independent ability of citizen groups to effectively demand accountability around taxation.