Estabilidad política y poder fiscal

political stability and tax power

Fernando Estrada

MPRA Paper from University Library of Munich, Germany

Abstract: The present study is, in particular, an attempt to test the relationship between tax level and political stability by using some economic control variables and to see the relationship among government effectiveness, corruption, and GDP. For the purpose, we used the Vector Autoregression (VAR) approach in the panel framework, using a country-level panel data from 59 countries for the period 2002 to 2008. The salient features of this model are: (a) simplicity is based on a limited number of variables (five) are categorical or continuous and not dependent on complex interactions or nonlinear effects. (b) accuracy: a low level of errors, the model achieves a high percentage of accuracy in distinguishing countries with inclination to political instability, compared to countries with political stability, (c) generality: the model allows to distinguish types of political instability, both resulting from acts of violence and failure of democracies to show, and (d) novelty: the model incorporates a tool that helps evaluate and exclude many variables used by the conventional literature. This approach is mainly based on the recognition of state structures and the relations between elites and parties

Keywords: Taxation; Political Stability; Connection; Effects; Panel VAR analysis (search for similar items in EconPapers)
JEL-codes: E62 E63 H2 H23 H3 H30 H71 (search for similar items in EconPapers)
Date: 2013, Revised 2014
New Economics Papers: this item is included in nep-mac
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