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Estabilidad política y tributación
[Taxation and political stability]

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  • Fernando, Estrada
  • Mihai, Mutascu
  • Aviral Kumar, Tiwari

Abstract

The present study is, in particular, an attempt to test the relationship between tax level and political stability by using some economic control variables and to see the relationship among government effectiveness, corruption, and GDP. For the purpose, we used the Vector Autoregression (VAR) approach in the panel framework, using a country-level panel data from 59 countries for the period 2002 to 2008. The salient features of this model are: (a) simplicity is based on a limited number of variables(five) are categorical or continuous and not dependent on complex interactions or nonlinear effects. (b) accuracy: a low level of errors, the model achieves a high percentage of accuracy in distinguishing countries with inclination to political instability, compared to countries with political stability, (c) generality: the model allows to distinguish types of political instability, both resulting from acts of violence and failure of democracies to show, and (d) novelty: the model incorporates a tool that helps evaluate and exclude many variables used by the conventional literature. This approach is mainly based on the recognition of state structures and the relations between elites and parties.

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Bibliographic Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 45226.

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Date of creation: 2013
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Handle: RePEc:pra:mprapa:45226

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Keywords: Taxation; Political Stability; Connection; Effects; Panel VAR analysis;

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  1. Dhaneshwar Ghura & Benoît Mercereau, 2004. "Political Instability and Growth," IMF Working Papers 04/80, International Monetary Fund.
  2. marina, azzimonti, 2009. "Barriers to investment in polarized societies," MPRA Paper 25936, University Library of Munich, Germany.
  3. Estrada, Fernando, 2010. "Devouring the Leviathan: fiscal policy and public expenditure in Colombia," MPRA Paper 21981, University Library of Munich, Germany.
  4. Volkerink, Bjørn & Haan, Jakob de, 1999. "Political and institutional determinants of the tax mix : an empirical investigation for OECD countries," Research Report 99E05, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
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  14. Ceyhun Elgin, 2010. "Political Turnover, Taxes and the Shadow Economy," Working Papers 2010/08, Bogazici University, Department of Economics.
  15. Janvier D. Nkurunziza, 2005. "Political Instability, Inflation Tax and Asset Substitution in Burundi," Journal of African Development, African Finance and Economic Association, vol. 7(1), pages 42-72.
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  18. Henrik Hammar & Sverker C. Jagers & Katarina Nordblom, 2008. "Attitudes towards Tax Levels: A Multi-Tax Comparison," Fiscal Studies, Institute for Fiscal Studies, vol. 29(4), pages 523-543, December.
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