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Sèna Kimm Gnangnon - One of the best experts on this subject based on the ideXlab platform.
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Effect of Development Aid on Tax Reform in Recipient-Countries: Does Trade Openness Matter?
Journal of International Commerce Economics and Policy, 2020Co-Authors: Sèna Kimm GnangnonAbstract:Based on a proposed measure of Tax reform in developing countries, this paper examines both how Tax reform is influenced by development aid flows, and whether this effect depends on countries’ degree of openness to international Trade. Tax reform involves here the change of the Tax structure in favor of domestic Tax revenue and at the expense of Trade Tax revenue. Empirical results based on 102 developing countries over the period 1980–2015 suggest that development aid exerts a positive effect on Tax reform in developing countries, with relatively less advanced countries enjoying a higher positive effect than advanced developing countries. Additionally, recipient-countries’ degree of Trade openness matters for the effect of development aid on Tax reform.
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Trade openness Tax reform and Tax revenue in developing countries
The World Economy, 2019Co-Authors: Sèna Kimm Gnangnon, Jeanfrancois BrunAbstract:This article investigates empirically whether the effect of Tax reform (involving the progressive replacement of Trade Tax revenue with domestic Tax revenue) in developing countries' Tax revenue performance (measured by Tax revenue‐to‐GDP ratio) depends on the degree of Trade openness of these countries. The analysis has used an unbalanced panel data set of 95 developing countries over the period 1981–2015 and the two‐system GMM approach. Results suggest that Tax reform is positively and significantly associated with Tax revenue performance in developing countries, with the magnitude of this positive effect increasing as countries experience a higher development level. Additionally, and more importantly, countries that further open up their economies to international Trade enjoy a higher positive effect of Tax reform on Tax revenue than countries that experience a lower degree of Trade openness. Therefore, these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international Trade would further erode their Tax revenue, including by lowering their international Trade Tax revenue. In fact, the implementation of an appropriate Tax reform in the context of greater Trade openness would generate higher Tax revenue, while concurrently allowing countries to reap the well‐known benefits of international Trade.
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Tax reform, public revenue and public revenue instability in developing countries: Does development aid matter?
2019Co-Authors: Jeanfrancois Brun, Sèna Kimm GnangnonAbstract:This paper addresses two main questions concerning the relationship between Tax reform, development aid, public revenue and public revenue instability in developing countries. Tax reform involves here a change in the Tax structure in favour of domestic public revenue and at the expense of international Trade Tax revenue. The analysis uses an unbalanced panel dataset of 95 developing countries over the period 1981-2015, and the two-step system Generalized Methods of Moments approach. Empirical findings show that Tax reform exerts a positive and significant effect on Tax revenue-to-GDP ratio, with the magnitude of this positive effect increasing as the amount of development aid flows that accrue to developing countries increases. In addition, while Tax reform exerts a reducing effect on Tax revenue instability, the magnitude of this reducing effect diminishes as the degree of development aid volatility increases. Specifically, beyond a certain level of development aid volatility, Tax reform enhances Tax revenue instability. Overall, these findings suggest that a rise in development aid flows to developing countries should be accompanied by a lower aid volatility so as to ensure that Tax reform would induce higher Tax revenue while concomitantly reducing Tax revenue instability in recipient-countries.
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Aid for Trade and Trade Tax revenues in developing countries
Economic Analysis and Policy, 2016Co-Authors: Sèna Kimm GnangnonAbstract:This paper examines whether Aid for Trade (AfT) compensates for the losses of Trade Tax revenues in developing countries further to the liberalization of their Trade regimes. The empirical analysis suggests that unlike other countries, AfT flows to highly AfT-dependent countries are not affected when these countries experience lower Trade Tax revenue. It would therefore be desirable that donors extend higher AfT to recipient-countries, notably poorest countries when they are confronted with losses in their Trade Tax revenue. This is particularly important for them given the structural challenges associated with their Tax transition reform.
Jeanfrancois Brun - One of the best experts on this subject based on the ideXlab platform.
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Trade openness Tax reform and Tax revenue in developing countries
The World Economy, 2019Co-Authors: Sèna Kimm Gnangnon, Jeanfrancois BrunAbstract:This article investigates empirically whether the effect of Tax reform (involving the progressive replacement of Trade Tax revenue with domestic Tax revenue) in developing countries' Tax revenue performance (measured by Tax revenue‐to‐GDP ratio) depends on the degree of Trade openness of these countries. The analysis has used an unbalanced panel data set of 95 developing countries over the period 1981–2015 and the two‐system GMM approach. Results suggest that Tax reform is positively and significantly associated with Tax revenue performance in developing countries, with the magnitude of this positive effect increasing as countries experience a higher development level. Additionally, and more importantly, countries that further open up their economies to international Trade enjoy a higher positive effect of Tax reform on Tax revenue than countries that experience a lower degree of Trade openness. Therefore, these findings should help dissipate the concerns of policymakers in developing countries that greater openness to international Trade would further erode their Tax revenue, including by lowering their international Trade Tax revenue. In fact, the implementation of an appropriate Tax reform in the context of greater Trade openness would generate higher Tax revenue, while concurrently allowing countries to reap the well‐known benefits of international Trade.
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Tax reform, public revenue and public revenue instability in developing countries: Does development aid matter?
2019Co-Authors: Jeanfrancois Brun, Sèna Kimm GnangnonAbstract:This paper addresses two main questions concerning the relationship between Tax reform, development aid, public revenue and public revenue instability in developing countries. Tax reform involves here a change in the Tax structure in favour of domestic public revenue and at the expense of international Trade Tax revenue. The analysis uses an unbalanced panel dataset of 95 developing countries over the period 1981-2015, and the two-step system Generalized Methods of Moments approach. Empirical findings show that Tax reform exerts a positive and significant effect on Tax revenue-to-GDP ratio, with the magnitude of this positive effect increasing as the amount of development aid flows that accrue to developing countries increases. In addition, while Tax reform exerts a reducing effect on Tax revenue instability, the magnitude of this reducing effect diminishes as the degree of development aid volatility increases. Specifically, beyond a certain level of development aid volatility, Tax reform enhances Tax revenue instability. Overall, these findings suggest that a rise in development aid flows to developing countries should be accompanied by a lower aid volatility so as to ensure that Tax reform would induce higher Tax revenue while concomitantly reducing Tax revenue instability in recipient-countries.
Julia Cage - One of the best experts on this subject based on the ideXlab platform.
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Tax revenues and the fiscal cost of Trade liberalization 1792 2006
Explorations in Economic History, 2018Co-Authors: Julia Cage, Lucie GadenneAbstract:This article examines the impact of Trade liberalization on government revenues. Using a new dataset on Tax revenues for 130 countries between 1792 and 2006, we identify ninety-nine episodes of Trade liberalization defined as a large fall in Trade Tax revenues not accompanied by a decrease in Trade. Seven took place before World War One, seven in the interwar period, eighteen in the Bretton Woods period and the remainder after 1970. We examine the extent to which countries were able to recover the Tax revenues lost by liberalizing Trade by using other sources of revenue. We find that historical (pre-1970) Trade liberalization episodes were unlikely to be accompanied by decreases in Tax revenues, especially during the Bretton Woods era. In the recent period however, over 40% of the developing countries in our sample experience a fall in total Tax revenues that lasts more than ten years after an episode of Trade liberalization. Overall, Trade liberalization led to larger and longer-lived declines in Tax revenues in developing countries since 1970 than in today’s rich countries in the 19th and 20th centuries. Results are similar when we consider government expenditures, suggesting decreases in Trade Tax revenues negatively affect governments’ capacity to provide public services in many developing countries.
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Newspapers in Times of Low Advertising Revenues
2015Co-Authors: Charles Angelucci, Julia CageAbstract:This paper puts the recent evolution of Tax revenues in developing countries in historical perspective. Using a novel dataset on total and Trade Tax revenues we compare the fiscal cost of Trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that Trade liberalization episodes led to larger and longer- lived decreases in total Tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total Tax revenues lasts more than ten years in half the developing countries in our sample.
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The Fiscal Cost of Trade Liberalization
2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper puts the recent evolution of Tax revenues in developing countries in historical perspective. Using a novel dataset on total and Trade Tax revenues we compare the fiscal cost of Trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that Trade liberalization episodes led to larger and longer-lived decreases in total Tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total Tax revenues lasts more than ten years in half the developing countries in our sample.
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Tax revenues development and the fiscal cost of Trade liberalization 1792 2006
Sciences Po publications, 2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper puts the recent evolution of Tax revenues in developing countries in historical perspective. Using a novel dataset on total and Trade Tax revenues we compare the fiscal cost of Trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that Trade liberalization episodes led to larger and longer- lived decreases in total Tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total Tax revenues lasts more than ten years in half the developing countries in our sample.
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Tax revenues development and the fiscal cost of Trade liberalization 1792 2006
The Warwick Economics Research Paper Series (TWERPS), 2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper examines the impact of Trade liberalizations on government revenues. Using a new dataset on Tax revenues for 130 countries between 1792 and 2006 we find that on average countries were able to recover the Tax revenues lost by liberalizing Trade by using other sources of revenue. There are however important differences between the experiences of developing countries and that of today's rich countries when they were at a similar state of development. Trade liberalization led to a larger decline in Tax revenues in developing countries since 1970 than in rich countries in the 19th and early 20th centuries. Over 40% of the developing countries in our sample experience a fall in total Tax revenues that lasts more than ten years after an episode of Trade liberalization. Results are similar when we consider government expenditures, suggesting decreases in Trade Tax revenues negatively affect governments' capacity to provide public services in many developing countries.
Lucie Gadenne - One of the best experts on this subject based on the ideXlab platform.
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Tax revenues and the fiscal cost of Trade liberalization 1792 2006
Explorations in Economic History, 2018Co-Authors: Julia Cage, Lucie GadenneAbstract:This article examines the impact of Trade liberalization on government revenues. Using a new dataset on Tax revenues for 130 countries between 1792 and 2006, we identify ninety-nine episodes of Trade liberalization defined as a large fall in Trade Tax revenues not accompanied by a decrease in Trade. Seven took place before World War One, seven in the interwar period, eighteen in the Bretton Woods period and the remainder after 1970. We examine the extent to which countries were able to recover the Tax revenues lost by liberalizing Trade by using other sources of revenue. We find that historical (pre-1970) Trade liberalization episodes were unlikely to be accompanied by decreases in Tax revenues, especially during the Bretton Woods era. In the recent period however, over 40% of the developing countries in our sample experience a fall in total Tax revenues that lasts more than ten years after an episode of Trade liberalization. Overall, Trade liberalization led to larger and longer-lived declines in Tax revenues in developing countries since 1970 than in today’s rich countries in the 19th and 20th centuries. Results are similar when we consider government expenditures, suggesting decreases in Trade Tax revenues negatively affect governments’ capacity to provide public services in many developing countries.
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The Fiscal Cost of Trade Liberalization
2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper puts the recent evolution of Tax revenues in developing countries in historical perspective. Using a novel dataset on total and Trade Tax revenues we compare the fiscal cost of Trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that Trade liberalization episodes led to larger and longer-lived decreases in total Tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total Tax revenues lasts more than ten years in half the developing countries in our sample.
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Tax revenues development and the fiscal cost of Trade liberalization 1792 2006
Sciences Po publications, 2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper puts the recent evolution of Tax revenues in developing countries in historical perspective. Using a novel dataset on total and Trade Tax revenues we compare the fiscal cost of Trade liberalization in developing countries and in today's rich countries at earlier stages of development. We find that Trade liberalization episodes led to larger and longer- lived decreases in total Tax revenues in developing countries since the 1970s than in rich countries in the 19th and early 20th centuries. The fall in total Tax revenues lasts more than ten years in half the developing countries in our sample.
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Tax revenues development and the fiscal cost of Trade liberalization 1792 2006
The Warwick Economics Research Paper Series (TWERPS), 2014Co-Authors: Julia Cage, Lucie GadenneAbstract:This paper examines the impact of Trade liberalizations on government revenues. Using a new dataset on Tax revenues for 130 countries between 1792 and 2006 we find that on average countries were able to recover the Tax revenues lost by liberalizing Trade by using other sources of revenue. There are however important differences between the experiences of developing countries and that of today's rich countries when they were at a similar state of development. Trade liberalization led to a larger decline in Tax revenues in developing countries since 1970 than in rich countries in the 19th and early 20th centuries. Over 40% of the developing countries in our sample experience a fall in total Tax revenues that lasts more than ten years after an episode of Trade liberalization. Results are similar when we consider government expenditures, suggesting decreases in Trade Tax revenues negatively affect governments' capacity to provide public services in many developing countries.
Hélène Ehrhart - One of the best experts on this subject based on the ideXlab platform.
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Commodity price volatility and Tax revenues: Evidence from developing countries
2012Co-Authors: Hélène Ehrhart, Samuel GuerineauAbstract:The recent boom and bust in commodity prices has renewed the policymakers' interest in three complementary issues: i) characteristics and determinants of commodity price instability, ii) its macroeconomic effects and, iii) the optimal policy responses to this instability. This work falls within the scope of studies dedicated to the macroeconomic effects of commodity price instability, but focuses on the impact on public finance, while existing works were concentrated on growth. This paper also differs from the few previous studies on two aspects. First, we test the impact of commodity price volatility rather than focusing only on price levels. Second, we use disaggregated data on Tax revenues (income Tax, consumption Tax and international Trade Tax) and on commodity prices (agricultural products, minerals and energy) in order to identify transmission channels between world prices and public finance variables. Our empirical analysis is carried out on 90 developing countries over 1980-2008. We compute an index which measures the volatility of the international price of 41 commodities in the sectors of agriculture, minerals and energy. We find robust evidence that Tax revenues in developing countries increase with the rise of commodity prices but that they are hurt by the volatility of these prices. More specifically, price short-run volatility of imported commodities hurts Tax revenues through Trade and consumption Taxes, while price medium-run volatility of export hurts Tax revenues through both indirect and direct Taxes. These findings point at the detrimental effect of commodity price volatility on developing countries public finances and highlight further the importance of finding ways to limit this price volatility and to implement policy measures to mitigate its adverse effects.
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the impact of high and volatile commodity prices on public finances evidence from developing countries
2012Co-Authors: Samuel Guerineau, Hélène EhrhartAbstract:The recent boom and bust in commodity prices has renewed the policymakers' interest in three complementary issues: i) characteristics and determinants of commodity price instability, ii) its macroeconomic effects and, iii) the optimal policy responses to this instability. This work falls within the scope of studies dedicated to the macroeconomic effects of commodity price instability, but focuses on the impact on public finance, while existing works were concentrated on growth. This paper also differs from the few previous studies on two aspects. First, we test the impact of commodity price volatility rather than focusing only on price levels. Second, we use disaggregated data on Tax revenues (income Tax, consumption Tax and international Trade Tax) and on commodity prices (agricultural products, minerals and energy) in order to identify transmission channels between world prices and public finance variables. Our empirical analysis is carried out on 90 developing countries over 1980-2008. We compute an index which measures the volatility of the international price of 41 commodities in the sectors of agriculture, minerals and energy. We find robust evidence that Tax revenues in developing countries increase with the rise of commodity prices but that they are hurt by the volatility of these prices. More specifically, increased prices on imported commodities, lead to increased Trade Taxes and (to a smaller extent) consumption Taxes being collected. Export prices are also positively associated with Tax revenue collection but the channel is through income Taxes and non-Tax revenues rather than international Trade Taxes and consumption Taxes. However, the volatility of commodity prices, both of imported and exported commodities, is robustly negatively affecting Tax revenues. These findings point at the detrimental effect of commodity price volatility on developing countries public finances and highlight further the importance of finding ways to limit this price volatility and to implement policy measures to mitigate its adverse effects.
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Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies
2011Co-Authors: Christian Hubert Ebeke, Hélène EhrhartAbstract:This paper focuses on the sources and consequences of the instability of Tax revenue in Sub-Saharan African countries. We take advantage of a unique and extraordinarily rich dataset on the composition of Tax revenues for a large number of countries. Using panel data for 39 countries observed over the period 1980-2005, our results are threefold. Firstly, the instability of government Tax revenue leads to an instability of both the public investment and government consumption, and finally, reduces the level of public investment. Secondly, foreign aid inflows appear to be an effective insurance mechanism against the instability of Tax revenue by lowering the sensitivity of public investment with respect to Tax revenue shocks. Finally, the reliance on domestic indirect Taxation-based systems seems more stabilizing than the dependency on Trade Tax revenue.