Does transparency pay ? The impact of EITI on tax revenues in resource-rich developing countries

Harouna Kinda (harouna.kinda@etu.uca.fr)
Additional contact information
Harouna Kinda: 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

Working Papers from HAL

Abstract: This paper assesses the "treatment effect" of Extractive Industries Transparency Initiative (EITI) membership on domestic tax revenues mobilization (DRM) in resource-rich developing countries through two main channels. The first consists of a fair tax system, and the second of spillover effects of productive expenditures favored by EITI. With 83 resource-rich developing countries (DCs) (46 EITI and 37 non-EITI) from 2001 to 2017, we use propensity score matching (PSM) to address the self-selection bias associated with EITI membership. The paper reveals that EITI-members have higher DRM than non-members and that DRM is higher when countries are compliant, even higher with quality of governance, and heterogeneous due to some structural factors. EITI commitment or candidacy impacts DRM significantly and positively compared to non-EITI (1.06 to 1.20 percentage points). EITI compliance generates a considerable surplus of DRM (1.09 to 1.13 percentage points) compared to non-compliant. Besides, the magnitudes of the impacts are more significant if we include governance indicators. The results are robust to non-resource tax (NRTAX) revenues and income tax.

Keywords: Natural resources; Extractive industries; Governance; Transparency; Evaluation; Domestic revenue mobilization. JEL Classification: C33; E62; O19; H2; Q32 (search for similar items in EconPapers)
Date: 2021-04
Note: View the original document on HAL open archive server: https://uca.hal.science/hal-03208955v2
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://uca.hal.science/hal-03208955v2/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:wpaper:hal-03208955

Access Statistics for this paper

More papers in Working Papers from HAL
Bibliographic data for series maintained by CCSD (hal@ccsd.cnrs.fr).