Taxation and the Village Fund

A functioning market economy requires goods that must be provided by the public sector (the government). These goods are called public goods, and range from infrastructure (roads, power, water and sanitation, airports, seaports, telecommunications systems) to working institutions (commercial law, judicial systems, government services, policing) that underpin the peaceful and prosperous division of labor. The provision of these services requires resources.

In the MV Sim, the public sector is modeled by having villagers tax themselves at a rate set by the village chief. The player can choose to have no tax rate, or to tax some percentage of income (from either farming, fishing, selling fuelwood, or small business income) beyond what is needed for subsistence. That is, the part of produce that is required for subsistence is not subject to tax. Tax revenues are collected in a Village Fund for the chief and villagers to draw upon for village-level investments such as paved road, power grid, latrines, water pump, irrigation , a clinic, and school meals.

Note that the currency used in the MV Sim is the CFA franc, the official currency of 12 countries in west and central Africa. $1 is approximately 450 CFA. All prices in the MV Sim are realistic approximations of prices in sub-Saharan Africa.