A Note on War and Fiscal Capacity in Developing Countries

Abdur Chowdhury () and Murshed Syed Mansoob ()
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Murshed Syed Mansoob: Erasmus University - International Institute of Social Studies, Kortenaerkade 12 Den Haag 2518 AX, The Netherlands; and Coventry University, Priory Street, Coventry CV1 5FB, UK

Peace Economics, Peace Science, and Public Policy, 2013, vol. 19, issue 3, 431-435

Abstract: We examine the effect of war on state fiscal capacity in developing countries, measured by tax revenue to GDP ratios. In divided or factionalised societies, patronage may substitute for common interest public goods, with the possibility of violent contestation over a rent. Our dynamic panel empirical estimates of the determinants of fiscal capacity are applied to 79 developing countries, during 1980–2010. Results indicate that war, especially civil war, retards fiscal capacity, along with poor governance, oil dependence and macroeconomic mismanagement.

Keywords: civil war; fiscal Capacity; developing countries (search for similar items in EconPapers)
Date: 2013
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DOI: 10.1515/peps-2013-0029

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