Assessing the relationship between democracy and domestic taxes in developing countries
AbstractTo what extent differences across developing countries in their domestic tax mobilization can be explained, in addition to the traditional determinants, by political economy factors and particularly by the political regime? Using a panel of 66 developing countries over the period 1990-2005, this paper provides econometric evidence that democracy matters for achieving higher domestic tax revenues which are much needed to finance public goods. It is especially the level of constraints on the executive which is of importance to counter the government's propensity to cave in for special interests and to be insufficiently welfare minded. We found that high levels of democracy are specifically needed in natural resource rich countries to make natural resource rents contribute to higher domestic tax revenues and no longer be an impediment to a sustained tax system.
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.
Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 200930.
Date of creation: 2009
Date of revision:
Tax Revenues; democracy; developing countries;
Other versions of this item:
- Helene Ehrhart, 2012. "Assessing the relationship between democracy and domestic taxes in developing countries," Economics Bulletin, AccessEcon, vol. 32(1), pages 551-566.
- Hélène Ehrhart, 2011. "Assessing the relationship between democracy and domestic taxes in developing countries," Working Papers halshs-00553607, HAL.
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- O1 - Economic Development, Technological Change, and Growth - - Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-01-30 (All new papers)
- NEP-DEV-2010-01-30 (Development)
- NEP-PBE-2010-01-30 (Public Economics)
- NEP-POL-2010-01-30 (Positive Political Economics)
- NEP-PUB-2010-01-30 (Public Finance)
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.:
- César Calderón & Alberto Chong, 2005.
"Do Democracies Breed Rent-Seeking Behavior?,"
Research Department Publications
4415, Inter-American Development Bank, Research Department.
- Bruno S. Frey & Benno Torgler, 2006.
"Tax Morale and Conditional Cooperation,"
CREMA Working Paper Series
2006-11, Center for Research in Economics, Management and the Arts (CREMA).
- Frey, Bruno S. & Torgler, Benno, 2006. "Tax Morale and Conditional Cooperation," Berkeley Olin Program in Law & Economics, Working Paper Series qt3rd3f982, Berkeley Olin Program in Law & Economics.
- Bruno S. Frey & Benno Torgler, 2006. "Tax Morale and Conditional Cooperation," IEW - Working Papers 286, Institute for Empirical Research in Economics - University of Zurich.
- Bornhorst, Fabian & Gupta, Sanjeev & Thornton, John, 2009. "Natural resource endowments and the domestic revenue effort," European Journal of Political Economy, Elsevier, vol. 25(4), pages 439-446, December.
- Robinson, James A & Torvik, Ragnar & Verdier, Thierry, 2002.
"Political Foundations of the Resource Curse,"
CEPR Discussion Papers
3422, C.E.P.R. Discussion Papers.
- Adam, Antonis & Delis, Manthos D. & Kammas, Pantelis, 2011.
"Are democratic governments more efficient?,"
European Journal of Political Economy,
Elsevier, vol. 27(1), pages 75-86, March.
- Christopher Adam & David Bevan, 2000.
"Exchange Rate Regimes and Revenue Performance in Sub-Saharan Africa,"
Economics Series Working Papers
9, University of Oxford, Department of Economics.
- Adam, Christopher S. & Bevan, David L. & Chambas, Gerard, 2001. "Exchange rate regimes and revenue performance in Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 64(1), pages 173-213, February.
- C S Adam, D L Bevan and G Chambas, . "Exchange Rate Regimes and Revenue Performance in Sub-Saharan Africa," QEH Working Papers qehwps35, Queen Elizabeth House, University of Oxford.
- Michael Keen & Mario Mansour, 2010. "Revenue Mobilisation in Sub-Saharan Africa: Challenges from Globalisation I - Trade Reform," Development Policy Review, Overseas Development Institute, vol. 28(5), pages 553-571, 09.
- Rajkumar, Andrew Sunil & Swaroop, Vinaya, 2008. "Public spending and outcomes: Does governance matter?," Journal of Development Economics, Elsevier, vol. 86(1), pages 96-111, April.
- Gérard CHAMBAS & Jean-François BRUN & Martial LAURENT, 2007.
"Economie politique de la réforme de transition fiscale : le cas du Maroc,"
- Jean-François Brun & Gérard Chambas & Martial Laurent, 2011. "Economie politique de la réforme de transition fiscale : le cas du Maroc," Working Papers halshs-00557066, HAL.
- Bird, Richard M. & Martinez-Vazquez, Jorge & Torgler, Benno, 2008. "Tax Effort in Developing Countries and High Income Countries: The Impact of Corruption, Voice and Accountability," Economic Analysis and Policy (EAP), Queensland University of Technology (QUT), School of Economics and Finance, vol. 38(1), pages 55-71, March.
- repec:cup:cbooks:9780521855266 is not listed on IDEAS
- Timothy Besley & Masayuki Kudamatsu, 2006. "Health and Democracy," American Economic Review, American Economic Association, vol. 96(2), pages 313-318, May.
- Keen, Michael & Lockwood, Ben, 2007.
"The Value Added Tax : Its Causes and Consequences,"
The Warwick Economics Research Paper Series (TWERPS)
801, University of Warwick, Department of Economics.
- Devashish Mitra & Dimitrios D. Thomakos & Mehmet A. Ulubaşoglu, 2002. ""Protection For Sale" In A Developing Country: Democracy Vs. Dictatorship," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 497-508, August.
- Lee, Woojin, 2003. "Is democracy more expropriative than dictatorship? Tocquevillian wisdom revisited," Journal of Development Economics, Elsevier, vol. 71(1), pages 155-198, June.
- Paul Clist & Oliver Morrissey, 2011. "Aid and tax revenue: Signs of a positive effect since the 1980s," Journal of International Development, John Wiley & Sons, Ltd., vol. 23(2), pages 165-180, March.
- Yannick Lucotte, 2010.
"The choice of adopting inflation targeting in emerging economies: Do domestic institutions matter?,"
- Lucotte, Yannick, 2010. "The choice of adopting inflation targeting in emerging economies: Do domestic institutions matter?," MPRA Paper 27118, University Library of Munich, Germany.
- Ivanyna, Maksym & von Haldenwang, Christian, 2012.
"A comparative view on the tax performance of developing countries: Regional patterns, non-tax revenue and governance,"
Economics Discussion Papers
2012-10, Kiel Institute for the World Economy.
- Ivanyna, Maksym & von Haldenwang, Christian, 2012. "A comparative view on the tax performance of developing countries: Regional patterns, non-tax revenue and governance," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 6(32), pages 1-44.
- Yannick Lucotte, 2010.
"Adoption of inflation targeting and tax revenue performance in emerging market economies: An empirical investigation,"
- Lucotte, Yannick, 2010. "Adoption of inflation targeting and tax revenue performance in emerging market economies: An empirical investigation," MPRA Paper 23871, University Library of Munich, Germany.
- Clarisse Nguedam Ntouko, 2013. "Regulatory Framework and Private Investment: Empirical Evidence for Developing Countries," Economics Bulletin, AccessEcon, vol. 33(1), pages 494-510.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Vincent Mazenod).
If references are entirely missing, you can add them using this form.