Sovereign rents and quality of tax policy and administration
AbstractWindfall revenues from foreign aid or natural resource exports can weaken governments' incentives to design or maintain efficient tax systems. Cross-country data for developing countries provide evidence for this hypothesis, using a World Bank indicator on "efficiency of revenue mobilization." Aid's negative effects on quality of tax systems are robust to correcting for potential reverse causality, to changes in the sample, and to alternative estimation methods. Revenues from natural resources are also associated with lower-quality tax systems, but results are somewhat sensitive to the choice of resource dependence indicators, and to a few extreme values in the data. Disaggregating by resource type, revenues from fuel exports are found to be more strongly associated than revenues from metals and ores exports with inefficient tax systems.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Journal of Comparative Economics.
Volume (Year): 37 (2009)
Issue (Month): 3 (September)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622864
Foreign aid Governance Revenue mobilization Tax policy Tax administration;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Simeon Djankov & Jose Montalvo & Marta Reynal-Querol, 2008.
"The curse of aid,"
Journal of Economic Growth,
Springer, vol. 13(3), pages 169-194, September.
- Simeon Djankov & José Garcia Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Economics Working Papers 870, Department of Economics and Business, Universitat Pompeu Fabra.
- Simeon Djankov & José G. Montalvo & Marta Reynal-Querol, 2005. "The curse of aid," Working Papers 257, Barcelona Graduate School of Economics.
- Anne D. Boschini & Jan Pettersson & Jesper Roine, 2006.
"Resource curse or not: A question of appropriability,"
DEGIT Conference Papers
c011_050, DEGIT, Dynamics, Economic Growth, and International Trade.
- Anne D. Boschini & Jan Pettersson & Jesper Roine, 2007. "Resource Curse or Not: A Question of Appropriability," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(3), pages 593-617, 09.
- Boschini, Anne & Pettersson, Jan & Roine, Jesper, 2003. "Resource curse or not: A question of appropriability," Working Paper Series in Economics and Finance 534, Stockholm School of Economics.
- Brautigam, Deborah A & Knack, Stephen, 2004. "Foreign Aid, Institutions, and Governance in Sub-Saharan Africa," Economic Development and Cultural Change, University of Chicago Press, vol. 52(2), pages 255-85, January.
- Janet Gale Stotsky & Asegedech WoldeMariam, 1997. "Tax Effort in Sub-Saharan Africa," IMF Working Papers 97/107, International Monetary Fund.
- Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
- Chaudhry, Kiren Aziz, 1989. "The price of wealth: business and state in labor remittance and oil economies," International Organization, Cambridge University Press, vol. 43(01), pages 101-145, December.
- Collier, Paul, 2006. "Is Aid Oil? An Analysis Of Whether Africa Can Absorb More Aid," World Development, Elsevier, vol. 34(9), pages 1482-1497, September.
- Dhaneshwar Ghura, 1998. "Tax Revenue in Sub-Saharan Africa - Effects of Economic Policies and Corruption," IMF Working Papers 98/135, International Monetary Fund.
- Lederman, Daniel & Maloney, William F., 2008.
"In search of the missing resource curse,"
Policy Research Working Paper Series
4766, The World Bank.
- Stephen Knack, 2001. "Aid Dependence and the Quality of Governance: Cross-Country Empirical Tests," Southern Economic Journal, Southern Economic Association, vol. 68(2), pages 310-329, October.
- Sachs, Jeffrey D. & Warner, Andrew M., 2001. "The curse of natural resources," European Economic Review, Elsevier, vol. 45(4-6), pages 827-838, May.
- Jonathan Isham & Michael Woolcock & Lant Pritchett & Gwen Busby, 2005. "The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth," World Bank Economic Review, World Bank Group, vol. 19(2), pages 141-174.
- Todd Moss & Gunilla Pettersson & Nicolas van de Walle, 2006. "An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa," Working Papers 74, Center for Global Development.
- William Easterly, 2002. "The cartel of good intentions: The problem of bureaucracy in foreign aid," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 5(4), pages 223-250.
- Simeon Djankov & Jose G. Montalvo & Marta Reynal-Querol, 2006. "Does Foreign Aid Help," Cato Journal, Cato Journal, Cato Institute, vol. 26(1), pages 1-28, Winter.
- Axel Dreher, 2009.
"IMF conditionality: theory and evidence,"
Springer, vol. 141(1), pages 233-267, October.
- Rafael Di Tella & Alberto Ades, 1999. "Rents, Competition, and Corruption," American Economic Review, American Economic Association, vol. 89(4), pages 982-993, September.
- Svensson, Jakob, 2000.
"Foreign aid and rent-seeking,"
Journal of International Economics,
Elsevier, vol. 51(2), pages 437-461, August.
- Hamilton, Kirk & Clemens, Michael, 1999. "Genuine Savings Rates in Developing Countries," World Bank Economic Review, World Bank Group, vol. 13(2), pages 333-56, May.
- Feyzioglu, Tarhan & Swaroop, Vinaya & Zhu, Min, 1998. "A Panel Data Analysis of the Fungibility of Foreign Aid," World Bank Economic Review, World Bank Group, vol. 12(1), pages 29-58, January.
- Tierney, Michael J. & Nielson, Daniel L. & Hawkins, Darren G. & Roberts, J. Timmons & Findley, Michael G. & Powers, Ryan M. & Parks, Bradley & Wilson, Sven E. & Hicks, Robert L., 2011. "More Dollars than Sense: Refining Our Knowledge of Development Finance Using AidData," World Development, Elsevier, vol. 39(11), pages 1891-1906.
- Knack, Stephen, 2013. "Aid and donor trust in recipient country systems," Journal of Development Economics, Elsevier, vol. 101(C), pages 316-329.
- Blanca MORENO DODSON & Grégoire Rota-Graziosi & Clémence Vergne, 2012.
"Breaking the wave of democracy: The effect of foreign aid on the incumbent's re-election probability,"
- Grégoire ROTA-GRAZIOSI & Clémence VERGNE & Blanca MORENO DODSON, 2012. "Breaking the wave of democracy: The effect of foreign aid on the incumbent’s re-election probability," Working Papers 201231, CERDI.
- Knack, Stephen, 2012. "When do donors trust recipient country systems ?," Policy Research Working Paper Series 6019, The World Bank.
- Knack, Stephen, 2013. "It's only words : validating the CPIA governance assessments," Policy Research Working Paper Series 6526, The World Bank.
- Baskaran, Thushyanthan & Bigsten, Arne, 2011. "Fiscal capacity and government accountability in sub-Saharan Africa," Working Papers in Economics 506, University of Gothenburg, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.