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Natural Resource Endowments, Governance, and the Domestic Revenue Effort: Evidence from a Panel of Countries

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  • Mr. John Thornton
  • Fabian Bornhorst
  • Mr. Sanjeev Gupta

Abstract

The recent development literature stresses that countries that receive large revenues from natural resource endowments typically raise less revenue from domestic taxation, and that this creates governance problems because the lower domestic tax effort reduces the incentive for the public scrutiny of government. Our results from a panel of 30 hydrocarbon producing countries indicate that the offset between hydrocarbon revenues and revenues from other domestic sources is about 20 percent but that it is invariant to governance indicators.

Suggested Citation

  • Mr. John Thornton & Fabian Bornhorst & Mr. Sanjeev Gupta, 2008. "Natural Resource Endowments, Governance, and the Domestic Revenue Effort: Evidence from a Panel of Countries," IMF Working Papers 2008/170, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2008/170
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    References listed on IDEAS

    as
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    2. repec:idq:ictduk:12795 is not listed on IDEAS
    3. Mr. Alexander Pivovarsky & Mr. Benedict J. Clements & Mr. Sanjeev Gupta & Mr. Erwin H Tiongson, 2003. "Foreign Aid and Revenue Response: Does the Composition of Aid Matter?," IMF Working Papers 2003/176, International Monetary Fund.
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    5. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    6. Anke Hoeffler & Paul Collier, 2005. "Democracy and Resource Rents," Economics Series Working Papers GPRG-WPS-016, University of Oxford, Department of Economics.
    7. Abhijit Sen Gupta, 2007. "Determinants of Tax Revenue Efforts in Developing Countries," IMF Working Papers 2007/184, International Monetary Fund.
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