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Does reduced trade tax revenue affect government spending patterns?

  • Michael Moore
  • Maurizio Zanardi

    ()

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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File URL: http://hdl.handle.net/10.1007/s10797-011-9191-y
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Article provided by Springer in its journal International Tax and Public Finance.

Volume (Year): 18 (2011)
Issue (Month): 5 (October)
Pages: 555-579

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Handle: RePEc:kap:itaxpf:v:18:y:2011:i:5:p:555-579
Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102915

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