How can poor countries get better governments? A recent paper~* by Lucy Martin of Yale University suggests higher taxes could help. Low-income African countries levy taxes worth about 17% of gdp each year, whereas the countries of the European Union take in nearly 40% on average. In some cases, foreign aid makes up some of the difference: according to the imf it constitutes about 10% of gdp in the Democratic Republic of Congo. In Liberia the figure is more like 15%. In 2012 the whole continent received $51 billion in foreign handouts. Low taxes and high aid flows, Ms Martin thinks, are a recipe for disengaged citizens and therefore for less effective governments. Her argument hinges on "loss aversion", an economic proposition that the pain of a loss is greater than the pleasure afforded by an equal gain. Most people, the thinking goes, care more about losing what they have than about getting something extra.
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