Natural resource rents and non-resource tax revenue mobilization in selected developing countries

Kadagde Dalam Debonheur

Resources Policy, 2025, vol. 105, issue C

Abstract: This paper examines the effects of natural resource rents on domestic public revenue mobilization, particularly focusing on non-resource tax revenues, in 59 developing countries over a period from 1996 to 2021. Using the two-step system GMM method, our results show that total natural resource rents are negatively associated with non-resource revenue mobilization and positively associated with total revenue mobilization. Specifically, non-renewable natural resources, such as oil and natural gas, are not conducive to non-resource tax revenue mobilization. Our results suggest that while energy (oil, natural gas, and coal) and non-energy (forestry and mining) resources are not conducive to non-resource revenue mobilization, they do contribute positively to total revenue mobilization. Additionally, public investment, grants, and control of corruption are positively associated with non-resource tax revenue mobilization. These findings study highlight the need for developing country governments to diversify their revenue sources, strengthen the transparency and efficiency of tax management, and invest in institutional quality to promote sustainable, sustained tax mobilization conducive to environmental sustainability.

Keywords: Natural resources; Non-resource tax revenue; Developing countries; System GMM (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:105:y:2025:i:c:s0301420725001643

DOI: 10.1016/j.resourpol.2025.105622

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