Politics in Reforming Taxes: Evidence from Developing Countries

Sanjeev Gupta and Joao Jalles

FinanzArchiv: Public Finance Analysis, 2024, vol. 80, issue 3, 303-331

Abstract: This paper empirically assesses the role of political variables in the implementation of tax reforms in a sample of 45 emerging market and low-income economies over the 2000-2015 period. The existing literature identifies several hypotheses that could drive reforms, but empirical studies that support these hypotheses are lacking. Using a narrative database of tax reforms and by means of binary-type models, our results suggest that a left-wing government is less inclined to implement tax reforms while both proximity to elections and political strength or cohesion are positively associated with tax reforms. The influence of the left government is stronger in low-income than in emerging market economies and revenue administration reforms are resisted the most by such governments. Proximity to elections seems to trigger reforms of personal income tax (PIT) but opposite holds for trade tax reforms. Political cohesion is a necessary ingredient to reform most tax categories and revenue administration.

Keywords: fiscal policy; binary choice models; tax reforms; elections; political fragmentation; ideology (search for similar items in EconPapers)
JEL-codes: C33 C36 D63 E32 E62 H20 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.mohrsiebeck.com/en/article/politics-in ... s-101628fa-2024-0013
Fulltext access is included for subscribers to the printed version.

Related works:
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:mhr:finarc:urn:doi:10.1628/fa-2024-0013

Ordering information: This journal article can be ordered from
Mohr Siebeck GmbH & Co. KG, P.O.Box 2040, 72010 Tübingen, Germany

DOI: 10.1628/fa-2024-0013

Access Statistics for this article

FinanzArchiv: Public Finance Analysis is currently edited by Alfons Weichenrieder, Ronnie Schöb and Jean-François Tremblay

More articles in FinanzArchiv: Public Finance Analysis from Mohr Siebeck, Tübingen
Bibliographic data for series maintained by Thomas Wolpert ().