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The Fiscal State in Africa: Evidence from a century of growth

Author

Listed:
  • Albers, Thilo N.

    (African Economic History Network)

  • Jerven, Morten

    (African Economic History Network)

  • Suesse, Marvin

    (African Economic History Network)

Abstract

Why do large differences in fiscal capacity exist between states in the Global South? We construct a comprehensive new dataset of tax and revenue collection for 46 African polities from 1900 to 2015. Descriptive analyses show that many polities in Africa have been characterized by strong growth in real tax collection. As a next step, we employ these data to test theories of fiscal capacity in a long-run panel setting, using fixed-effects and causal estimation techniques. The results show democratic institutions and interstate warfare can increase fiscal capacity, while government turnover reduces it. However, these factors are conditional on the availability of debt financing and external aid, which by themselves reduce incentives to invest in fiscal capacity. Leveraging new data on exogenous movements in commodity prices, we show that resource income does not generally lead to lower capacity. These insights add important nuance to established theories of state-building.

Suggested Citation

  • Albers, Thilo N. & Jerven, Morten & Suesse, Marvin, 2020. "The Fiscal State in Africa: Evidence from a century of growth," African Economic History Working Paper 55/2019, African Economic History Network.
    • Handle: RePEc:hhs:afekhi:2019_055
    DOI: https://www.aehnetwork.org/wp-content/uploads/2020/09/AEHN-WP-55.pdf
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    Cited by:

    1. Denis Cogneau & Yannick Dupraz & Justine Knebelmann & Sandrine Mesplé-Somps, 2021. "Taxation in Africa from Colonial Times to Present Evidence from former French colonies 1900-2018," Working Papers halshs-03420664, HAL.
    2. Dhammika Dharmapala & Marvin Suesse, 2025. "Decolonization, Legitimacy and Fiscal Capacity: Event Study Evidence from Africa," CESifo Working Paper Series 12059, CESifo.
    3. Fetzer, Thiemo & Shaw, Callum & Edenhofer, Jacob, 2024. "Informational Boundaries of the State," CEPR Discussion Papers 18773, C.E.P.R. Discussion Papers.
    4. repec:idq:ictduk:16977 is not listed on IDEAS
    5. 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).
    6. Pierre Bachas & Matthew Fisher-Post & Anders Jensen & Gabriel Zucman, 2022. "Globalization and Factor Income Taxation," Working Papers halshs-03693211, HAL.
    7. 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.
    8. Abrams M.E. Tagem & Oliver Morrissey, 2021. "What are the drivers of tax capacity in sub-Saharan Africa?," WIDER Working Paper Series wp-2021-161, World Institute for Development Economic Research (UNU-WIDER).

    More about this item

    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • N47 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Africa; Oceania

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