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Does conditionality in IMF-supported programs promote revenue reform?

Listed author(s):
  • Ernesto Crivelli

    ()

    (International Monetary Fund)

  • Sanjeev Gupta

    ()

    (International Monetary Fund)

Abstract This paper studies whether revenue conditionality in Fund programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993–2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.

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Article provided by Springer & International Institute of Public Finance in its journal International Tax and Public Finance.

Volume (Year): 23 (2016)
Issue (Month): 3 (June)
Pages: 550-579

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Handle: RePEc:kap:itaxpf:v:23:y:2016:i:3:d:10.1007_s10797-015-9379-7
DOI: 10.1007/s10797-015-9379-7
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