How Effective Are Informal User Fees in Enhancing Community Development in the Southwestern Region of Nigeria? A SEM Approach

This study evaluates the effectiveness of informal user fees in enhancing community development in the Southwest region of Nigeria using a structural equation modelling (SEM) approach on a sample of 12,377 residents across 48 local government areas in the 6 states of the region. Its findings suggest that informal contributions are positive predictors of community development projects in security, sanitation, human capital development and infrastructure maintenance. Efforts of the residents highlight the critical role of grassroots organizations in local development. Enhancing the effectiveness of these efforts requires state governments to implement a unified policy that harmonizes informal tax systems and governance practices. JEL Classifications: H71, O12, R58, R51