IDEAS home Printed from https://ideas.repec.org/a/wly/jintdv/v33y2021i2p396-421.html
   My bibliography  Save this article

Domestic revenue mobilisation in developing countries: An exploratory analysis of sub‐Saharan Africa and Latin America

Author

Listed:
  • Abel Gwaindepi

Abstract

This study compares taxation trends, volatility and tax effort between sub‐Saharan Africa (SSA) and Latin American and the Caribbean (LAC) countries since 1980. It finds that the LAC countries lead on revenue collection and revenue stability, but richer SSA countries outperform their LAC counterparts. Since 2010, there has been a divergence on personal income taxes, which have grown in SSA but declined in the LAC. The panel analysis shows that tax determinants are sensitive to income levels. The study shows the importance of exploring diversity and cross‐regional variations on income levels. Additionally, it shows that room exists for peer‐to‐peer lessons on tax reforms.

Suggested Citation

  • Abel Gwaindepi, 2021. "Domestic revenue mobilisation in developing countries: An exploratory analysis of sub‐Saharan Africa and Latin America," Journal of International Development, John Wiley & Sons, Ltd., vol. 33(2), pages 396-421, March.
    • Handle: RePEc:wly:jintdv:v:33:y:2021:i:2:p:396-421
    DOI: 10.1002/jid.3528
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/jid.3528
    Download Restriction: no
    File URL: https://libkey.io/10.1002/jid.3528?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Institutions and the Resource Curse," Economic Journal, Royal Economic Society, vol. 116(508), pages 1-20, January.
    2. Bertrand LAPORTE & Gérard CHAMBAS & Jean-François BRUN, 2010. "IMF programs and tax effort What role for institutions in Africa?," Working Papers 201033, CERDI.
    3. Timothy Besley & Torsten Persson, 2010. "State Capacity, Conflict, and Development," Econometrica, Econometric Society, vol. 78(1), pages 1-34, January.
    4. Cagé, Julia & Gadenne, Lucie, 2018. "Tax revenues and the fiscal cost of trade liberalization, 1792–2006," Explorations in Economic History, Elsevier, vol. 70(C), pages 1-24.
    5. Hermann D. Yohou & Michaël Goujon & Wautabouna Ouattara, 2016. "Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries," Journal of African Economies, Centre for the Study of African Economies, vol. 25(3), pages 468-498.
    6. Thandika Mkandawire, 2010. "On Tax Efforts and Colonial Heritage in Africa," Journal of Development Studies, Taylor & Francis Journals, vol. 46(10), pages 1647-1669.
    7. Halvor Mehlum & Karl Moene & Ragnar Torvik, 2006. "Cursed by Resources or Institutions?," The World Economy, Wiley Blackwell, vol. 29(8), pages 1117-1131, August.
    8. Moore, Mick & Prichard, Wilson & Fjeldstad, Odd-Helge, 2018. "Taxing Africa: Coercion, Reform and Development," Working Papers 13997, Institute of Development Studies, International Centre for Tax and Development.
    9. Albers, Thilo N.H. & Jerven, Morten & Suesse, Marvin, 2023. "The Fiscal State in Africa: Evidence from a Century of Growth," International Organization, Cambridge University Press, vol. 77(1), pages 65-101, January.
    10. repec:cep:stieop:41 is not listed on IDEAS
    11. Ligomeka, Waziona, 2019. "Expensive to be a Female Trader: The Reality of Taxation of Flea Market Traders in Zimbabwe," Working Papers 14430, Institute of Development Studies, International Centre for Tax and Development.
    12. Marcelo Piancastelli & A.P.Thirlwall, 2019. "The Determinants of Tax Revenue and Tax Effort in Developed and Developing Countries: Theory and New Evidence 1995-2015," Studies in Economics 1903, School of Economics, University of Kent.
    13. Mr. Michael Keen, 2012. "Taxation and Development: Again," IMF Working Papers 2012/220, International Monetary Fund.
    14. Timothy Besley & Torsten Persson, 2014. "Why Do Developing Countries Tax So Little?," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 99-120, Fall.
    15. Richard M. Bird, 2014. "Foreign advice and tax policy in developing countries," Chapters, in: Richard M. Bird & Jorge Martinez-Vazquez (ed.), Taxation and Development: The Weakest Link?, chapter 4, pages 103-144, Edward Elgar Publishing.
    16. Mr. Patrick Fossat & Mr. Michel Bua, 2013. "Tax Administration Reform in the Francophone Countries of Sub-Saharan Africa," IMF Working Papers 2013/173, International Monetary Fund.
    17. Djedje Hermann YOHOU & Michaël GOUJON, 2017. "Reassessing Tax Effort in Developing Countries: a Proposal of a Vulnerability-Adjusted Tax Effort Index (VATEI)," Working Papers P186, FERDI.
    18. Ellen Hillbom & Jutta Bolt, 2018. "An African Diamond in the Rough," Palgrave Studies in Economic History, in: Botswana – A Modern Economic History, chapter 1, pages 3-24, Palgrave Macmillan.
    19. Simplice Asongu, 2015. "On Taxation, Political Accountability and Foreign Aid: Empirics to a Celebrated Literature," South African Journal of Economics, Economic Society of South Africa, vol. 83(2), pages 180-198, June.
    20. Joshua Aizenman & Yothin Jinjarak & Jungsuk Kim & Donghyun Park, 2015. "Tax Revenue Trends in Asia and Latin America: A Comparative Analysis," NBER Working Papers 21755, National Bureau of Economic Research, Inc.
    21. Thuto Botlhole & John Asafu-Adjaye & Fabrizio Carmignani, 2012. "Natural Resource Abundance, Institutions And Tax Revenue Mobilisation In Sub-Sahara Africa," South African Journal of Economics, Economic Society of South Africa, vol. 80(2), pages 135-156, June.
    22. Brautigam,Deborah & Fjeldstad,Odd-Helge & Moore,Mick (ed.), 2008. "Taxation and State-Building in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521888158.
    23. Gardner, Leigh A., 2012. "Taxing Colonial Africa: The Political Economy of British Imperialism," OUP Catalogue, Oxford University Press, number 9780199661527, Decembrie.
    24. Sérgio Wulff Gobetti & Rodrigo Octávio Orair, 2015. "Taxation and distribution of income in Brazil: new evidence from personal income tax data," One Pager 312, International Policy Centre for Inclusive Growth.
    25. Philipp Genschel & Laura Seelkopf, 2016. "Did they learn to tax? Taxation trends outside the OECD," Review of International Political Economy, Taylor & Francis Journals, vol. 23(2), pages 316-344, April.
    26. Sérgio Wulff Gobetti & Rodrigo Octávio Orair, 2017. "Taxation and distribution of income in Brazil: new evidence from personal income tax data," Brazilian Journal of Political Economy, Center of Political Economy, vol. 37(2), pages 267-286.
    27. Richard Grabowski, 2010. "A comparison of Latin American and African economic development with an East Asian twist," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 24(2), pages 104-116, November.
    28. Jannie Rossouw & Michael Ade & Tendai Gwatidzo, 2017. "Analysis of tax harmonisation in the SADC," Working Papers 684, Economic Research Southern Africa.
    29. Abel Gwaindepi & Krige Siebrits, 2020. "‘Hit your man where you can’: Taxation strategies in the face of resistance at the British Cape Colony, c.1820 to 1910," Economic History of Developing Regions, Taylor & Francis Journals, vol. 35(3), pages 171-194, September.
    30. Persson, Torsten & Besley, Tim, 2013. "Taxation and Development," CEPR Discussion Papers 9307, C.E.P.R. Discussion Papers.
    31. Abel Gwaindepi & Johan Fourie, 2020. "Public Sector Growth in the British Cape Colony: Evidence From New Data on Expenditure and Foreign Debt, 1830‐1910," South African Journal of Economics, Economic Society of South Africa, vol. 88(3), pages 341-367, September.
    32. Bates, Robert H. & Coatsworth, John H. & Williamson, Jeffrey G., 2007. "Lost Decades: Postindependence Performance in Latin America and Africa," The Journal of Economic History, Cambridge University Press, vol. 67(4), pages 917-943, December.
    33. Jahnke, Björn & Weisser, Reinhard A., 2019. "How does petty corruption affect tax morale in Sub-Saharan Africa?," European Journal of Political Economy, Elsevier, vol. 60(C).
    34. Mr. David A. Grigorian & Mr. Hamid R Davoodi, 2007. "Tax Potential vs. Tax Effort: A Cross-Country Analysis of Armenia's Stubbornly Low Tax Collection," IMF Working Papers 2007/106, International Monetary Fund.
    35. Joweria M. Teera & John Hudson, 2004. "Tax performance: a comparative study," Journal of International Development, John Wiley & Sons, Ltd., vol. 16(6), pages 785-802.
    36. van den Boogaard, Vanessa & Prichard, Wilson & Benson, Matthew S. & Milicic, Nikola, 2018. "Tax Revenue Mobilization in Conflict†affected Developing Countries," Working Papers 13659, Institute of Development Studies, International Centre for Tax and Development.
    37. Ligomeka, Waziona, 2019. "Expensive to be a Female Trader: The Reality of Taxation of Flea Market Traders in Zimbabwe," Working Papers 14419, Institute of Development Studies, International Centre for Tax and Development.
    38. Vanessa van den Boogaard & Wilson Prichard & Matthew S. Benson & Nikola Milicic, 2018. "Tax Revenue Mobilization in Conflict†affected Developing Countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 30(2), pages 345-364, March.
    39. Brautigam,Deborah & Fjeldstad,Odd-Helge & Moore,Mick (ed.), 2008. "Taxation and State-Building in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521716192.
    40. Moore, Mick & Prichard, Wilson & Fjeldstad, Odd-Helge, 2018. "Taxing Africa," University of Chicago Press Economics Books, University of Chicago Press, number 9781783604548, Febrero.
    41. Prichard, Wilson, 2016. "Reassessing Tax and Development Research: A New Dataset, New Findings, and Lessons for Research," World Development, Elsevier, vol. 80(C), pages 48-60.
    42. Baskaran, Thushyanthan & Bigsten, Arne, 2013. "Fiscal Capacity and the Quality of Government in Sub-Saharan Africa," World Development, Elsevier, vol. 45(C), pages 92-107.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Krishna Chaitanya Vadlamannati & Samuel Brazys, 2023. "Does cultural diversity hinder the implementation of IMF-supported programs? An empirical investigation," The Review of International Organizations, Springer, vol. 18(1), pages 87-116, January.
    2. Annalena Oppel & Kyle McNabb & Daniel Chachu, 2022. "The dynamics of domestic revenue mobilization across four decades," WIDER Working Paper Series wp-2022-1, World Institute for Development Economic Research (UNU-WIDER).
    3. Favourate y Mpofu, 2022. "Sustainable mobilisation of tax revenues to enhance economic growth in Sub-Saharan Africa: Challenges, opportunities, and possible areas of reform," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 11(9), pages 222-233, December.
    4. Abel Gwaindepi, 2022. "Fiscal capacity in ‘‘responsible government’’ colonies: the Cape Colony in comparative perspective, c. 1865–1910 [The spread of empire: Clio and the measurement of colonial borrowing costs]," European Review of Economic History, European Historical Economics Society, vol. 26(3), pages 340-369.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gwaindepi, Abel, 2019. "Domestic revenue mobilization in Sub-Saharan Africa and Latin America: A comparative analysis since 1980," Lund Papers in Economic History 209, Lund University, Department of Economic History.
    2. Andersson, Jens & Lazuka, Volha, 2019. "Long-term drivers of taxation in francophone West Africa 1893–2010," World Development, Elsevier, vol. 114(C), pages 294-313.
    3. von Haldenwang, Christian, 2020. "Digitalising the fiscal contract: An interdisciplinary framework for empirical inquiry," IDOS Discussion Papers 20/2020, German Institute of Development and Sustainability (IDOS).
    4. Abel Gwaindepi, 2022. "Fiscal capacity in ‘‘responsible government’’ colonies: the Cape Colony in comparative perspective, c. 1865–1910 [The spread of empire: Clio and the measurement of colonial borrowing costs]," European Review of Economic History, European Historical Economics Society, vol. 26(3), pages 340-369.
    5. Marina Nistotskaya & Michelle D'Arcy, 2021. "No taxation without property rights: Formalization of property rights on land and tax revenues from individuals in sub-Saharan Africa," WIDER Working Paper Series wp-2021-175, World Institute for Development Economic Research (UNU-WIDER).
    6. Alou Adessé Dama, 2021. "Exploring Tilly’s Theory : Violent Conflicts and Tax Revenue in Sub-Saharan Africa," CERDI Working papers hal-03401539, HAL.
    7. Lisa Chauvet & Marin Ferry, 2021. "Taxation, infrastructure, and firm performance in developing countries," Public Choice, Springer, vol. 187(3), pages 455-480, June.
    8. Mawejje, Joseph & Sebudde, Rachel K., 2019. "Tax revenue potential and effort: Worldwide estimates using a new dataset," Economic Analysis and Policy, Elsevier, vol. 63(C), pages 119-129.
    9. Marin Ferry, 2019. "The carrot and stick approach to debt relief: overcoming moral hazard," Journal of African Economies, Centre for the Study of African Economies, vol. 28(3), pages 252-276.
    10. Gwaindepi, Abel, 2019. "Serving God and Mammon: The ‘Minerals-Railway Complex’ and its effects on colonial public finances in the British Cape Colony, 1810-1910," African Economic History Working Paper 44/2019, African Economic History Network.
    11. Ane Karoline Bak & Matilde Jeppesen & Anne Mette Kjær, 2021. "Fiscal states in sub-Saharan Africa: conceptualization and empirical trends," WIDER Working Paper Series wp-2021-182, World Institute for Development Economic Research (UNU-WIDER).
    12. Albers, Thilo N.H. & Jerven, Morten & Suesse, Marvin, 2023. "The Fiscal State in Africa: Evidence from a Century of Growth," International Organization, Cambridge University Press, vol. 77(1), pages 65-101, January.
    13. Moore, Mick, 2014. "Revenue Reform and Statebuilding in Anglophone Africa," World Development, Elsevier, vol. 60(C), pages 99-112.
    14. Roel Dom, 2017. "Semi-Autonomous Revenue Authorities in Sub-Saharan Africa: Silver Bullet or White Elephant," Discussion Papers 2017-01, University of Nottingham, CREDIT.
    15. Broms, Rasmus, 2017. "Colonial Revenue Extraction and Modern Day Government Quality in the British Empire," World Development, Elsevier, vol. 90(C), pages 269-280.
    16. Moore, Mick, 2021. "Glimpses of Fiscal States in Sub-Saharan Africa," Working Papers 16977, Institute of Development Studies, International Centre for Tax and Development.
    17. Farzana Chowdhury & David B. Audretsch & Maksim Belitski, 2019. "Institutions and Entrepreneurship Quality," Entrepreneurship Theory and Practice, , vol. 43(1), pages 51-81, January.
    18. Robert Dibie & Raphael Dibie, 2020. "Analysis of the Determinants of Tax Policy Compliance in Nigeria," Journal of Public Administration and Governance, Macrothink Institute, vol. 10(2), pages 3462-3462, December.
    19. Lisa Chauvet & Marin Ferry, 2021. "Taxation, infrastructure, and firm performance in developing countries," Public Choice, Springer, vol. 187(3), pages 455-480, June.
    20. Leanora Alecia Brown & Jorge Martinez-Vazquez, 2015. "International Debt Forgiveness: Who Gets Picked and Its Effect On The Tax Effort Of Developing Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1504, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wly:jintdv:v:33:y:2021:i:2:p:396-421. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www3.interscience.wiley.com/journal/5102/home .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.