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Does reduced trade tax revenue affect government spending patterns?

Author

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  • Michael Moore
  • Maurizio Zanardi

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Abstract

Many skeptics of trade liberalization in the developing world argue that lowering trade taxes can cause significant fiscal pressures in countries particularly reliant on these taxes and result in a reallocation of resources away from important development goals. This paper evaluates whether there is evidence that central governments systematically change the composition of spending priorities in the wake of lowered trade tax revenues as a share of total government revenues. We find no systematic evidence for this concern in a sample of 51 developing countries for the 1991 through 2005 period. © 2011 Springer Science+Business Media, LLC.
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Suggested Citation

  • Michael Moore & Maurizio Zanardi, 2011. "Does reduced trade tax revenue affect government spending patterns?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 18(5), pages 555-579, October.
  • Handle: RePEc:kap:itaxpf:v:18:y:2011:i:5:p:555-579
    DOI: 10.1007/s10797-011-9191-y
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    References listed on IDEAS

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    Cited by:

    1. Bryane Michael & Maja Popov, 2016. "The Failure of Theory to Predict the Way Public Sector Organisation Responds to its Organisational Environment and the Need for a Mosaic-View of Organisational Theory," Public Organization Review, Springer, vol. 16(1), pages 55-75, March.

    More about this item

    Keywords

    Government expenditure; Tariff revenue; Trade liberalization; H7; F13;

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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