Taxes and Economic Growth: The Role of the Central Government

Diego Gomez, Sebastian Aparicio, David Urbano and Diego Martinez-Moya
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Diego Gomez: Fundación ECSIM
David Urbano: Universitat Autònoma de Barcelona
Diego Martinez-Moya: Fundación ECSIM

Chapter 6 in Driving Complexity in Economic Development, 2023, pp 167-196 from Springer

Abstract: Abstract The literature that relates tax burdens to economic growth has focused on explaining the effect of taxes on GDP. However, it has neglected two fundamental aspects. First, the role that the institutional framework plays in taxes and, second, the effect of these taxes on growth, such as income and the business sector. Thus, this research aims to estimate and unveil the effect of taxes (determined by government performance) on economic growth. Results show that government performance has a significant and positive effect on taxes, which in turn has a negative and significant effect on economic growth, allowing policy recommendations.

Keywords: Taxes; Economic growth; Government; Institutions (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-34386-5_6

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DOI: 10.1007/978-3-031-34386-5_6

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