Sacha Dray

I am an Economist at the World Bank in the Macroeconomics, Trade, and Investment (MTI) Global Practice. I am also a visiting research fellow at the London School of Economics.

My work covers public finance, political economy, and development. I study the taxation of firms and individuals as well as how people comply with public policies. Recently, I have worked on how cities can strengthen their capacity to collect property taxes, and the role of trust for compliance with quasi-voluntary policies.

[Curriculum Vitae] [Google Scholar] [Twitter]

Contact information:

Email: sdray[at]

Mailing: 1818 H Street, N.W., Washington, DC 20433, USA

Working Papers

Trust as State Effectiveness: The Political Economy of Compliance - [UPDATED! June 2023]
[Revise and Resubmit at the Economic Journal] 

(with Tim Besley) [UNU WIDER Working Paper]

This paper explores the link between trust in government, policymaking and compliance. It focuses on a specific channel whereby citizens who are convinced of the merits of a policy are more motivated to comply with it. This in turn reduces the government’s cost of implementing this policy and may also increase the set of feasible interventions. As a result, state effectiveness is greater when citizens trust their government. The paper discusses alternative approaches to modelling the origins of trust, especially the link to the design of political institutions. We then provide empirical evidence consistent with the model’s findings that compliance is increasing in government trust using the Integrated Values Survey and voluntary compliance during COVID-19 in the UK.

Wealth and Property Taxation in the United States - NBER Working Paper 31080  [UPDATED! March 2023]
[Revise and Resubmit at the Quarterly Journal of Economics]

(with Camille Landais and Stefanie Stantcheva) [Slides] [NBER Working Paper]

We study the history and geography of wealth accumulation in the US, using newly collected historical property tax records since the early 1800s. The property tax in the US was a comprehensive tax on all kinds of properties (real estate, personal property, and financial wealth), making it one of the first “wealth taxes.” Drawing on a multitude of historical records, we construct wealth series at the city, county, and state levels over time offering a consistent, high-frequency, and long-term database of wealth in the US. We first document the long-term evolution of household wealth in the US since the early 1800s, showing that the US experience an extraordinary spur of wealth accumulation after the Civil war and until the Great Depression. Before the Civil war, enslaved people were assessed as personal property of the enslavers, which is both morally abhorrent and implies wrongly counting forced labor income flows as capital. The regional distribution of wealth and the effects of the Civil war look very different if we do not count enslaved people as property. Second, we study the spatial inequality in the US over the long run. The initial distribution of property and subsequent growth over 60 years are strongly correlated with geographic, economic, and demographic factors. In particular, wealth inequality has a robust negative correlation with growth in property over the long run. Finally, we study the role of public policy, specifically the property tax (i.e., a “wealth tax”) on local capital accumulation, using the large and long variation in property tax rates across more than 300 municipalities. We find significant elasticities on the intensive and extensive (migration) margins, as well as evidence for tax competition between cities

This paper explores the importance of tax revenue for future revenue collection capacity, spending, and growth of local governments. Using newly collected financial data of more than 300 U.S. cities over 1899-2000, I leverage source-specific variation in revenue through a shift-share research design. I report three main results. First, additional tax revenue causes greater spending on services than same-sized non-tax revenue, despite partial earmarking of non-tax revenue for this purpose. Second, tax revenue generates persistence in revenue. An initial increase in tax revenue has a 81% persistence on total revenue 10 years later, while similar non-tax revenue increase has dissipated after 3 years. This persistence can be explained by fiscal capacity improvements through higher effective tax rates, better enforcement and increased spending on revenue collection. Third, reliance on taxes has long-run effects on municipal finances and growth. Cities with initially higher tax revenue per capita in 1910-1936 have greater revenue and expenditure per capita throughout the next 60 years, as well as a higher median household income, larger population and migration.  

This paper measures the role of salience in the behavioral response of taxpayers. I focus on the 2011 reform of the UK income tax that introduced both salient changes in the tax schedule (a new marginal tax rate of 50% on income above £150,000) as well as nonsalient changes (the withdrawal of tax-free personal allowance for income above £100,000). I develop a conceptual framework to account for inattention as a form of optimization friction when estimating the elasticity of taxation income, provide testable predictions, and derive a measure of attention. Empirical evidence from administrative data confirm the importance of tax inattention. I also find significant learning over time, reducing inattention by 40% up to 10 years after the introduction of the reform. These results have implications for measuring the elasticity of taxable income, and suggest only short-run gains from using salience as a policy parameter.


The Political Economy of Lockdown: Does Free Media Matter? - European Journal of Political Economy, 2023

(with Tim Besley) [Appendix] [VoxTalks] [CEPR Working Paper] [LSE Covid-19 blog]

This paper studies the role of free media in how governments and the public responded to the COVID-19 pandemic. We first document the presence of policy and behavioral responsiveness during the early phase of the pandemic. Using a panel data of daily COVID-19 deaths, lockdown policies, and mobility changes in 155 countries, we find that governments were more likely to impose a lockdown, and citizens to reduce their mobility, as the initial number of deaths increased. To measure the role of media freedom on responsiveness given endogeneity in death reporting, we simulate deaths from a calibrated SEIR model as an instrument for reported deaths. Using this approach, we find evidence that the presence of free media mattered for the timing of early responses to COVID-19. Responsiveness to deaths was limited to citizens in free-media countries, and accounted for 40% of the difference in lockdown decision and mobility changes between free-media and censored-media countries. In support of the role of free media, we show that differences in responsiveness are not explained by a range of other country characteristics such as the level of income, education or democracy. We also find evidence that citizens with access to free media were better informed about the pandemic and had more responsive levels of online searches about COVID-19, supporting the view that free media served to inform the public on the risks of COVID-19.

We study changes in social distancing and government policy in response to local outbreaks during the COVID-19 pandemic. Using aggregated county-level data from approximately 20 million smartphones in the United States, we show that social distancing behaviors have responded to local outbreaks: a 1% increase in new cases (deaths) is associated with a 3% (11%) increase in social distancing intensity. Responsiveness is reinforced by the presence of public measures restricting movements, but remains significant in their absence. Responsiveness is higher in high-income, more educated, or Democrat-leaning counties, and in counties with low health insurance coverage. By contrast, social capital and vulnerability to infection are strongly associated with more social distancing but not with more responsiveness. Our results point to the importance of politics, trust and reciprocity for compliance with social distancing, while material constraints are more critical for being responsive to new risks such as the emergence of variants. 

Why have countries responded differently to the COVID-19 pandemic? We explore the role of institutions in shaping the response of governments and citizens to the progression of the disease, both conceptually and empirically. We document a puzzling fact: countries with “good institutions”–strong executive constraints, the holding of free and fair elections and more freedom–tend to have performed worse during the initial phase of the pandemic. They have been slower to implement a lockdown and experienced a larger death toll. On the other hand, countries with higher interpersonal trust and higher confidence in government appear to have fared better. We find limited evidence of differences in mobility reduction by citizens based on institutions in their country.

Policy Papers & Book Chapters

This brief summarizes the main benefits of taxing property for developing cities, identifies current challenges in the design of property tax systems, and draw lessons from recent reforms in developing countries. 

This paper reviews lessons from the public finance literature and consider how they can be applied in developing countries. I first summarize 5 standard policy prescriptions from the optimal taxation literature : 1) optimal taxation should balance both equity-efficiency concerns and evasion-enforcement concerns ; 2) only final goods should be taxed ; 3) final goods should be taxed uniformly ; 4) redistribution should include transfers toward low-income earners ; 5) taxes should depend on personal characteristics as well as income. I then summarize results from empirical studies and adapt these policy prescriptions to the context of developing countries. I highlight the following channels as effective to improve tax systems: tax instruments, tax administration, tax enforcement and tax morale. In addition, fiscal capacity appears to be closely linked to economic development. As countries develop, they progressively increase their capacity to collect taxes effectively. I develop a conceptual framework that incorporates the main dimensions of fiscal policy for developing countries. 

Tax Compliance in a Crisis: Evidence from the Great Depression 

in Tax Evasion and Tax Havens since the Nineteenth Century, (Eds. Sébastien Guex and Hadrien Buclin, Palgrave Macmillan), 2023

This paper explores the factors associated with the non-payment of property taxes during the Great Depression. U.S. cities experienced skyrocketing levels of property tax non-compliance during 1929-1933, with an average loss of a quarter of their tax revenue in 1933. We present two main findings. First, we find that tax delinquency is negatively associated with economic conditions and taxpayer ability to pay, and is positively correlated with the presence of elections. Cities that experienced higher levels of delinquency tended to have fewer new construction of housing units, lower median income, and delinquency was higher during mayoral election years. We find no association between delinquency and burden of taxation or tax administrations measured by the salary of tax assessors and the presence of reduced rates for personal property. Second, despite the transitory nature of this episode, tax delinquency had a persistent impact on municipal revenue. Moving from the 25th to the 75th percentile of delinquency in 1929-1933 is associated with a 5% lower tax base valuation, tax revenue and municipal spending at the end of the Great Depression.

Emperors Without Sceptres: Early Colonial Leaders' Personality and Civil Conflicts

(with Quoc-Anh Do, Elise Huillery and Jean-Louis Keene) 

We investigate the role of colonial leaders in shaping contemporary civil conflicts in  former  French  colonies  in  Western  Africa.   We  argue  that  the  earliest  leaders of  the  colonial  era  made  key  decisions  in  building  local  government  that  shaped local perceptions of,  and interactions with,  the state that led to variation in the local populations’ hostility towards the colonial government.  Using the arguably arbitrary assignment of early colonial district leaders, we show that the personality of the first district leaders affected colonial hostility, and that such hostility has led to more modern civil conflicts.