Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies
AbstractThis paper focuses on the sources and consequences of the instability of tax revenue in Sub-Saharan African countries. We take advantage of a unique and extraordinarily rich dataset on the composition of tax revenues for a large number of countries. Using panel data for 39 countries observed over the period 1980-2005, our results are threefold. Firstly, the instability of government tax revenue leads to an instability of both the public investment and government consumption, and finally, reduces the level of public investment. Secondly, foreign aid inflows appear to be an effective insurance mechanism against the instability of tax revenue by lowering the sensitivity of public investment with respect to tax revenue shocks. Finally, the reliance on domestic indirect taxation-based systems seems more stabilizing than the dependency on trade tax revenue.
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Bibliographic InfoPaper provided by CERDI in its series Working Papers with number 201025.
Date of creation: 2010
Date of revision:
Tax Instability; Tax Composition; public spending; foreign aid; Sub-Saharan Africa;
Other versions of this item:
- Christian Ebeke & Helene Ehrhart, 2012. "Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies," Journal of African Economies, Centre for the Study of African Economies (CSAE), Centre for the Study of African Economies (CSAE), vol. 21(1), pages 1-27, January.
- Christian Ebeke & HÃ©lÃ¨ne Ehrhart, 2011. "Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies," Working Papers halshs-00552230, HAL.
- Ebeke, C. & Ehrhart, H., 2013. "Tax Revenue Instability in sub-Saharan Africa: Consequences and Remedies," Working papers, Banque de France 418, Banque de France.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
This paper has been announced in the following NEP Reports:
- NEP-ACC-2010-09-25 (Accounting & Auditing)
- NEP-AFR-2010-09-25 (Africa)
- NEP-ALL-2010-09-25 (All new papers)
- NEP-PBE-2010-09-25 (Public Economics)
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