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A dynamic efficiency analysis for tax revenues in OECD countries

Author

Listed:
  • António Afonso

    (Universidade de Lisboa
    UECE)

  • Ana Patricia Montes

    (University of Malaga
    University of Málaga)

  • José M. Domínguez

    (University of Malaga)

Abstract

In this paper, we estimate the potential tax burden in a panel data set comprising OECD countries over the period 2000–2021. To this end, we use non-parametric and parametric techniques: Data Envelopment Analysis and Stochastic Frontier Analysis. In this way, it will be possible for us to identify which countries are close to their potential tax capacity and which are far from it. Moreover, we can determine whether they may sustain an increase (decrease) in their actual tax burden depending on whether the tax effort ratio is lower or higher relatively to other similar countries in the sample. Non-parametric and parametric results coincide rather closely on the positioning of the countries vis-à-vis the production possibility frontier and on their relative distances to the frontier. Efficient countries most of the times are: Belgium, Colombia, Finland, France, Italy, Latvia, Slovak Republic, and Sweden.

Suggested Citation

  • António Afonso & Ana Patricia Montes & José M. Domínguez, 2025. "A dynamic efficiency analysis for tax revenues in OECD countries," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 52(2), pages 377-411, May.
    • Handle: RePEc:kap:empiri:v:52:y:2025:i:2:d:10.1007_s10663-024-09640-0
    DOI: 10.1007/s10663-024-09640-0
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    More about this item

    Keywords

    OECD; Tax burden; Tax efficiency; Stochastic Frontier analysis; Data envelopment analysis;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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