CANCELLED: Spillovers in State Capacity Building: Evidence from the Digitization of Land Records in Pakistan

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Strong legal and fiscal capacity are both crucial to foster economic development, yet we know little about how these two forms of state capacity interact. Using a newly digitized administrative dataset on agricultural taxation and surveys of local bureaucrats from Punjab, Pakistan, we show that legal capacity reforms can have unintended consequences for fiscal capacity. We exploit the staggered roll-out of the digitization of land records in Punjab as a source of random variation in legal capacity and find 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 bureaucracy's capacity to collect taxes. The paper thus sheds light on the importance of understanding state capacity development from an organisational perspective.