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On the mobilization of domestic resources in oil countries: The role of historical factors

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  • Luc Désiré Omgba

Abstract

This paper investigates the sources of variability in the mobilization of domestic tax revenue in oil-producing countries. It argues that the type of natural resources exploited during colonial rule can affect the contemporary levels of domestic tax revenue in oil countries. We test this conjecture by regressing non-oil tax revenue on a proxy of extractive capacity, which is the distance between the date of the beginning of oil production and the date of a country’s political independence. The results show that this proxy of extractive capacity positively affects the nonoil tax revenue of oil-producing countries, and these results are robust to various sensitivity checks. The persistence of the pre-existing extractive institutions as well as their subsequent privileged position explain why the elites have no interest in changing this scenario.

Suggested Citation

  • Luc Désiré Omgba, 2016. "On the mobilization of domestic resources in oil countries: The role of historical factors," WIDER Working Paper Series 154, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2016-154
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2016-154.pdf
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    5. C. A. Hidalgo & B. Klinger & A. -L. Barabasi & R. Hausmann, 2007. "The Product Space Conditions the Development of Nations," Papers 0708.2090, arXiv.org.
    6. Omgba, Luc Désiré, 2015. "Why Do Some Oil-Producing Countries Succeed in Democracy While Others Fail?," World Development, Elsevier, vol. 76(C), pages 180-189.
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    9. Daron Acemoglu & Simon Johnson & James A. Robinson, 2001. "The Colonial Origins of Comparative Development: An Empirical Investigation," American Economic Review, American Economic Association, vol. 91(5), pages 1369-1401, December.
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    11. Jose R. Lopez-Calix & Peter Walkenhorst & Ndiame Diop, 2010. "Trade Competitiveness of the Middle East and North Africa : Policies for Export Diversification," World Bank Publications, The World Bank, number 2466, September.
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    Keywords

    tax revenues; oil resources; economic history;

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