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Taxation, non tax revenue and democracy
Taxation, Non-Tax Revenue and Accountability: New Evidence Using New Cross-Country Data.
Resource curse, i.e. the theory stating that natural resource-rich countries that heavily rely on resource revenues are more likely to develop autocratic or dictatorial regimes, has been vastly investigated in the literature.
However, although there exists numerous numbers of cross-country studies of the political resource curse, conflicting results and inconsistencies continue to emerge after more than a decade. These inconsistencies can be attributed to imprecise indicators and poor data quality, inconsistent estimation methods, and failure at distinguishing alternative causal processes, linked to tax and non-tax revenue.
The main innovation of this paper is the use of the ICTD GRD to re-investigate the relationship between government revenues and democracy. Indeed, this new dataset allows for a clear decomposition of government revenue into tax and non-tax revenue, the latter being mainly composed of natural resource revenues. Then, multiple econometric estimation methods are employed to ensure better robustness of the results (including GMM, Mean-Group, Random and Fixed-Effect, and Logit Error Correction Model). Finally, a whole set of robustness checks are run with the inclusion of longer lags on the revenue variables, alternative measures of democracy and different time periods among others.
The authors find stronger evidence of the resource curse than previous studies as the impact of either tax reliance or non-tax revenue on democracy is negative and significant in all the specifications and methods.
The relationship between tax and democracy is more ambiguous, sometimes positive but most often insignificant. This may reflect a greater complexity of causal processes between those two variables. An important finding is that this relationship happens to operate over the long term, i.e. results are stronger with estimators that focus on longer-term changes in composition of government revenue, rather than short-term variation. Finally, the paper has been made easy to be replicated in order to allow for future comparisons using the ICTD GRD.
Udyog sanchetana oct '15
Its the 19th issue of a monthly eNewsletter dedicated to Engineering education and a bridge to connect with MSME industry.
Manual de usuario: firma de documentos con ESP
Firma de documentos con ESP (Entrust Service Provider)
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Destacado
Taxation, non tax revenue and democracy
Taxation, Non-Tax Revenue and Accountability: New Evidence Using New Cross-Country Data.
Resource curse, i.e. the theory stating that natural resource-rich countries that heavily rely on resource revenues are more likely to develop autocratic or dictatorial regimes, has been vastly investigated in the literature.
However, although there exists numerous numbers of cross-country studies of the political resource curse, conflicting results and inconsistencies continue to emerge after more than a decade. These inconsistencies can be attributed to imprecise indicators and poor data quality, inconsistent estimation methods, and failure at distinguishing alternative causal processes, linked to tax and non-tax revenue.
The main innovation of this paper is the use of the ICTD GRD to re-investigate the relationship between government revenues and democracy. Indeed, this new dataset allows for a clear decomposition of government revenue into tax and non-tax revenue, the latter being mainly composed of natural resource revenues. Then, multiple econometric estimation methods are employed to ensure better robustness of the results (including GMM, Mean-Group, Random and Fixed-Effect, and Logit Error Correction Model). Finally, a whole set of robustness checks are run with the inclusion of longer lags on the revenue variables, alternative measures of democracy and different time periods among others.
The authors find stronger evidence of the resource curse than previous studies as the impact of either tax reliance or non-tax revenue on democracy is negative and significant in all the specifications and methods.
The relationship between tax and democracy is more ambiguous, sometimes positive but most often insignificant. This may reflect a greater complexity of causal processes between those two variables. An important finding is that this relationship happens to operate over the long term, i.e. results are stronger with estimators that focus on longer-term changes in composition of government revenue, rather than short-term variation. Finally, the paper has been made easy to be replicated in order to allow for future comparisons using the ICTD GRD.
Udyog sanchetana oct '15
Its the 19th issue of a monthly eNewsletter dedicated to Engineering education and a bridge to connect with MSME industry.
Manual de usuario: firma de documentos con ESP
Firma de documentos con ESP (Entrust Service Provider)