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Political Competition and Tax Revenues in Developing Countries

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  • Urbain T. Yogo
  • Martine M. Ngo Njib

Abstract

Building on the literature of the political economy of taxation, this article explores the relationship between political competition and tax revenues using a sample of 89 developing countries from 1988 to 2010. Owing to the inertia of tax variables, we estimate a dynamic panel data model using the Blundell and Bond two†step System†general method of moments. The analysis led to the following results: political competition positively and significantly affects total tax revenues. However, this general pattern slightly differs across the type of taxes; and the net effect of political competition on tax revenues is negative for countries that have adopted fiscal rules. © 2018 UNU†WIDER. Journal of International Development published by John Wiley & Sons, Ltd.

Suggested Citation

  • Urbain T. Yogo & Martine M. Ngo Njib, 2018. "Political Competition and Tax Revenues in Developing Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(2), pages 302-322, March.
    • Handle: RePEc:wly:jintdv:v:30:y:2018:i:2:p:302-322
    DOI: 10.1002/jid.3349
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    References listed on IDEAS

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    1. Jonathan Di John, 2006. "The Political Economy of Taxation and Tax Reform in Developing Countries," WIDER Working Paper Series RP2006-74, World Institute for Development Economic Research (UNU-WIDER).
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    7. Mrs. Nina Budina & Ms. Andrea Schaechter & Miss Anke Weber & Mr. Tidiane Kinda, 2012. "Fiscal Rules in Response to the Crisis: Toward the "Next-Generation" Rules: A New Dataset," IMF Working Papers 2012/187, International Monetary Fund.
    8. Bierbrauer, Felix J. & Boyer, Pierre C., 2013. "Political competition and Mirrleesian income taxation: A first pass," Journal of Public Economics, Elsevier, vol. 103(C), pages 1-14.
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    6. Rezki, Jahen Fachrul, 2018. "Political Competition and Local Government Performance: Evidence from Indonesia," SocArXiv nekps, Center for Open Science.

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