IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v176y2024ics0305750x23003352.html
   My bibliography  Save this article

Is the conventional wisdom on resource taxation correct? Mining evidence from African countries' tax legislations

Author

Listed:
  • Amedanou, Isaac
  • Laporte, Bertrand

Abstract

Our study reexamines the link between country risk and government take, following research by Adebayo et al. (2021). Our approach complements theirs. We study the mining tax policy choices in an environment of uncertainty and risk country for twenty-one African gold-producing countries. We calculate a de jure government take based on the complete application of laws and regulations for three “representative mines”. Our results reconcile Adebayo et al.'s theoretical model with empirical results. Higher country risk is associated with lower de jure government take. We also show a complex nonlinear relationship between country risk and de jure government take. Finally, our results suggest that stronger political institutions “capture” a lower de jure government take. The coefficient of the interaction term suggests that as the political regime becomes more democratic, the marginal effect of country risk on de jure government revenue becomes increasingly less adverse up to a specific threshold, beyond which it turns positive. We then introduce each political component of country risk and its interaction term to track transmission channels.

Suggested Citation

  • Amedanou, Isaac & Laporte, Bertrand, 2024. "Is the conventional wisdom on resource taxation correct? Mining evidence from African countries' tax legislations," World Development, Elsevier, vol. 176(C).
    • Handle: RePEc:eee:wdevel:v:176:y:2024:i:c:s0305750x23003352
    DOI: 10.1016/j.worlddev.2023.106517
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X23003352
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2023.106517?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ajide, Kazeem B. & Adenuga, Juliet I. & Raheem, Ibrahim D., 2020. "Natural resource rents, political regimes and terrorism in Africa," International Economics, Elsevier, vol. 162(C), pages 50-66.
    2. Fraser, Jamie, 2022. "Worth its weight in gold: is the extractive industries transparency initiative a credible signalling mechanism to investors?," Environment and Development Economics, Cambridge University Press, vol. 27(5), pages 436-450, October.
    3. Francesco Caselli & Andrea Tesei, 2016. "Resource Windfalls, Political Regimes, and Political Stability," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 573-590, July.
    4. Adebayo, Eric & Lashitew, Addisu A. & Werker, Eric, 2021. "Is conventional wisdom about resource taxation correct? Mining evidence from transparency reporting," World Development, Elsevier, vol. 146(C).
    5. Bertrand Laporte & Celine de Quatrebarbes & Yannick Bouterige, 2022. "Tax design and rent sharing in mining sector: Evidence from African gold‐producing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 34(6), pages 1176-1196, August.
    6. Khoshnoodi, Abdollah & Farouji, Majid Dashtban & de Haan, Jakob, 2022. "The effect of natural resources rents on institutional and policy reform: New evidence," Resources Policy, Elsevier, vol. 78(C).
    7. Busse, Matthias & Hefeker, Carsten, 2007. "Political risk, institutions and foreign direct investment," European Journal of Political Economy, Elsevier, vol. 23(2), pages 397-415, June.
    8. repec:oup:jafrec:v:22:y:2013:i:4:p:-569 is not listed on IDEAS
    9. Sovacool, Benjamin K. & Andrews, Nathan, 2015. "Does transparency matter? Evaluating the governance impacts of the Extractive Industries Transparency Initiative (EITI) in Azerbaijan and Liberia," Resources Policy, Elsevier, vol. 45(C), pages 183-192.
    10. Haber, Stephen & Menaldo, Victor, 2011. "Do Natural Resources Fuel Authoritarianism? A Reappraisal of the Resource Curse," American Political Science Review, Cambridge University Press, vol. 105(1), pages 1-26, February.
    11. Devereux, Michael P. & Griffith, Rachel, 1998. "Taxes and the location of production: evidence from a panel of US multinationals," Journal of Public Economics, Elsevier, vol. 68(3), pages 335-367, June.
    12. Antonio Cabrales & Esther Hauk, 2011. "The Quality of Political Institutions and the Curse of Natural Resources," Economic Journal, Royal Economic Society, vol. 121(551), pages 58-88, March.
    13. Rabah Arezki & Thorvaldur Gylfason, 2013. "Resource Rents, Democracy, Corruption and Conflict: Evidence from Sub-Saharan Africa," Journal of African Economies, Centre for the Study of African Economies, vol. 22(4), pages 552-569, August.
    14. Andersen, Jørgen Juel & Aslaksen, Silje, 2013. "Oil and political survival," Journal of Development Economics, Elsevier, vol. 100(1), pages 89-106.
    15. Virginia Haufler, 2010. "Disclosure as Governance: The Extractive Industries Transparency Initiative and Resource Management in the Developing World," Global Environmental Politics, MIT Press, vol. 10(3), pages 53-73, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deyi Xu & Shiquan Dou & Yongguang Zhu & Jinhua Cheng, 2024. "Resource nationalism: the intersection of politics and economics," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Yawovi Mawussé Isaac Amedanou & Yannick Bouterige & Bertrand Laporte, 2023. "Institutional and political drivers for copper government take: new evidence for African and Latin American countries," CERDI Working papers hal-04213102, HAL.
    2. Brausmann, Alexandra & Grieg, Elise, 2024. "Resource discoveries and the political survival of dictators," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    3. Alexandra Brausmann & Elise Grieg, 2020. "Resource Discoveries and the Political Survival of Dictators," CER-ETH Economics working paper series 20/345, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    4. Zallé, Oumarou, 2023. "Natural resource rents and regime durability: Identifying cross-country durability regimes," Resources Policy, Elsevier, vol. 81(C).
    5. Tcheta-Bampa, Tcheta-Bampa & Kodila-Tedika, Oasis, 2018. "Dynamisation de la malédiction des ressources naturelles en Afrique sur les performances économiques : institution et guerre froide [Curse of Natural Resources and Economic Performance in Africa: I," MPRA Paper 86510, University Library of Munich, Germany.
    6. Phoebe W. Ishak & Mohammad Reza Farzanegan, 2022. "Oil price shocks, protest, and the shadow economy: Is there a mitigation effect?," Economics and Politics, Wiley Blackwell, vol. 34(2), pages 298-321, July.
    7. Francesco Caselli & Andrea Tesei, 2016. "Resource Windfalls, Political Regimes, and Political Stability," The Review of Economics and Statistics, MIT Press, vol. 98(3), pages 573-590, July.
    8. Maldonado, Stanislao, 2014. "The Non-Monotonic Political Effects of Resource Booms," MPRA Paper 85649, University Library of Munich, Germany, revised 18 Dec 2017.
    9. Ishak Phoebe W., 2019. "Autocratic Survival Strategies: Does Oil Make a Difference?," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 25(2), pages 1-22, May.
    10. Jørgen Juel Andersen & Martin Nordvik & Andrea Tesei, 2017. "Oil and Civil Conflict: On and Off (Shore)," Working Papers 810, Queen Mary University of London, School of Economics and Finance.
    11. Takaharu, Ishii, 2024. "Interactions between natural resources and false democracy?," Resources Policy, Elsevier, vol. 95(C).
    12. Nemera Gebeyehu Mamo, 2018. "Essays on natural resources in Africa: local economic development, multi-ethnic coalitions and armed conflict," Economics PhD Theses 0518, Department of Economics, University of Sussex Business School.
    13. Phoebe W. Ishak & Mohammad Reza Farzanegan, 2022. "Oil price shocks, protest, and the shadow economy: Is there a mitigation effect?," Economics and Politics, Wiley Blackwell, vol. 34(2), pages 298-321, July.
    14. Lujala, Päivi, 2018. "An analysis of the Extractive Industry Transparency Initiative implementation process," World Development, Elsevier, vol. 107(C), pages 358-381.
    15. Ngassam, Sylvain B. & Asongu, Simplice A. & Ngueuleweu, Gildas Tiwang, 2024. "A revisit of the natural resource curse in the tourism industry," Resources Policy, Elsevier, vol. 88(C).
    16. Raouf Boucekkine & Rodolphe Desbordes & Paolo Melindi-Ghidi, 2023. "Elite-led revolutions," AMSE Working Papers 2319, Aix-Marseille School of Economics, France.
    17. Eugen Dimant & Guglielmo Tosato, 2018. "Causes And Effects Of Corruption: What Has Past Decade'S Empirical Research Taught Us? A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 32(2), pages 335-356, April.
    18. Federico Carril‐Caccia & Elena Pavlova, 2020. "Mergers and acquisitions & trade: A global value chain analysis," The World Economy, Wiley Blackwell, vol. 43(3), pages 586-614, March.
    19. Matata Ponyo Mapon & Jean-Paul K. Tsasa, 2019. "The artefact of the Natural Resources Curse," Papers 1911.09681, arXiv.org.
    20. Christopher Hajzler & Jonathan Rosborough, 2016. "Government Corruption and Foreign Direct Investment Under the Threat of Expropriation," Staff Working Papers 16-13, Bank of Canada.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:176:y:2024:i:c:s0305750x23003352. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.