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Taxation, foreign aid and political governance: figures to the facts of a celebrated literature

Simplice Asongu ()

No 14/022, Working Papers from African Governance and Development Institute.

Abstract: This paper puts figures to the facts of Eubank (2012), a recently celebrated paper in the Journal of Development Studies. We investigate the underpinning Somaliland-based hypothesis that foreign aid dilutes the positive role of taxation on political governance. The assessment is based on 53 African countries for the period 1996-2010. For more policy options, the dataset is disaggregated into fundamental characteristics of African development based on income-levels, legal origins, natural resources and landlockeness. While the Eubank hypothesis is invalid in baseline Africa, low-income and English common law countries of the continent, we cannot conclude on its validity for other fundamental characteristics of development. Policy implications, caveats and future directions are discussed.

Keywords: Foreign Aid; Political Economy; Development; Africa (search for similar items in EconPapers)
JEL-codes: B20 F35 F50 O10 O55 (search for similar items in EconPapers)
Date: 2014-08
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http://www.afridev.org/RePEc/agd/agd-wpaper/Taxati ... rated-literature.pdf Revised version, 2014 (application/pdf)

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