Revisiting the Relationship between Trade Liberalization and Taxation

Grégoire Rota-Graziosi (), Rabah Arezki and Alou Adessé Dama
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Grégoire Rota-Graziosi: CERDI - Centre d'Études et de Recherches sur le Développement International - IRD - Institut de Recherche pour le Développement - CNRS - Centre National de la Recherche Scientifique - UCA - Université Clermont Auvergne

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Abstract: This paper explores the dynamic effects of trade liberalization on tax revenue using a worldwide panel dataset. Results point to statistically significant negative effect of liberalization on (non- resource) tax revenues in the short term and no significant effect in the medium term. Liberalization also alter the tax structure tilting revenues toward indirect taxes away from direct ones. Economies which have implemented value added taxes prior to liberalization have mitigated its negative effects on tax revenues. The evidence is supportive of the complementarity role of state capacity to reap the benefits of liberalization.

Keywords: Tax; Tax structures; Openness; Liberalization; Natural resources (search for similar items in EconPapers)
Date: 2021-06
New Economics Papers: this item is included in nep-int
Note: View the original document on HAL open archive server: https://uca.hal.science/hal-03265604v1
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Related works:
Working Paper: Revisiting the Relationship between Trade Liberalization and Taxation (2021)
Working Paper: Revisiting the Relationship between Trade Liberalization and Taxation (2021)
Working Paper: Revisiting the Relationship between Trade Liberalization and Taxation (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:cdiwps:hal-03265604

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