The Fiscal State in Africa: Evidence from a Century of Growth

Thilo N. H. Albers, Morten Jerven and Marvin Suesse
Additional contact information
Thilo N. H. Albers: HU Berlin and Lund University
Morten Jerven: Norwegian University of Life Sciences

No 316, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: What is the level of state capacity in developing countries today, and what have been its drivers over the past century? We construct a comprehensive new dataset of tax and revenue collection for 46 African polities from 1900 to 2015. Descriptive analysis shows that many polities in Africa have been characterized by strong growth in fiscal capacity. As a next step, we explain this growth using a fixed-effects long-run panel setting. The results show that canonical state-building factors such as democratic institutions and interstate warfare can increase revenue collection, while government turnover reduces it. Access to external credit and foreign aid are even more important, and both negatively affect fiscal capacity. In addition, access to external revenues, especially from commodity exports and debt, moderates the operation of canonical state-building factors such as democracy and conflict. These insights add important nuances to established theories of state building. Not only are states in Africa more capable than hitherto thought, but the international environment shapes their capacity, both directly and indirectly.

Keywords: fiscal capacity; Africa; statehood; resources; external finance (search for similar items in EconPapers)
Date: 2022-01-29
New Economics Papers: this item is included in nep-afr, nep-dev, nep-fdg and nep-his
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://rationality-and-competition.de/wp-content/uploads/2022/01/316.pdf (application/pdf)

Related works:
Journal Article: The Fiscal State in Africa: Evidence from a Century of Growth (2023)
Working Paper: The Fiscal State in Africa: Evidence from a century of growth (2020)
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:rco:dpaper:316

Access Statistics for this paper

More papers in Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition
Bibliographic data for series maintained by Viviana Lalli ().