Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries

Michael Goujon, Wautabouna Ouattara () and Hermann Yohou ()

No 201506, Working Papers from CERDI

Abstract: We examine the heterogeneous effects due to government stability of foreign aid on tax revenues in the West African Economic and Monetary Union countries over the period 1986-2010. We show that the tax effects of aid are gradual and varying across countries according to the level of government stability. The Panel Smooth Threshold Regressions indicate that at low levels of government stability, aid negatively affects tax performances. At high levels, it encourages tax collection. Consequently, we provide estimates of individual time varying coefficients of aid effects. In general, the positive effects are marked since the mid of 1990 decade. However, decomposing aid into its forms of loans, technical and non-technical grants provides nuanced results.

Keywords: Foreign aid; Government Stability; Tax revenue; PSTR; WAEMU (search for similar items in EconPapers)
JEL-codes: C23 F35 H20 O17 O55 (search for similar items in EconPapers)
Pages: 35
Date: 2015-03
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (3)

Published in Journal of African Economies, 2016, pages 468-498
Published in Journal of African Economies

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Related works:
Journal Article: Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries (2016)
Working Paper: Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries (2016)
Working Paper: Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries (2015)
Working Paper: Heterogeneous Aid Effects on Tax Revenues: Accounting for Government Stability in WAEMU Countries (2015)
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