Does conditionality in IMF-supported programs promote revenue reform?

Ernesto Crivelli () and Sanjeev Gupta

No 2014/206, IMF Working Papers from International Monetary Fund

Abstract: This paper studies whether revenue conditionality in Fund-supported programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993-2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.

Keywords: WP; revenue conditionality; IMF-supported program; tax revenue; IMF conditionality; revenue collection; structural conditionality; conditionality dummy; tax revenue performance; Consumption taxes; Value-added tax; Tax administration core functions; Personal income; Global; Sub-Saharan Africa (search for similar items in EconPapers)
Pages: 32
Date: 2014-11-19
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Citations: View citations in EconPapers (8)

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