Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies

Christian Hubert Ebeke () and Hélène Ehrhart
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Hélène Ehrhart: CERDI - Centre d'Études et de Recherches sur le Développement International - UdA - Université d'Auvergne - Clermont-Ferrand I - CNRS - Centre National de la Recherche Scientifique

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Abstract: This paper focuses on the sources and consequences of the instability of tax revenue in Sub-Saharan African countries. We take advantage of a unique and extraordinarily rich dataset on the composition of tax revenues for a large number of countries. Using panel data for 39 countries observed over the period 1980-2005, our results are threefold. Firstly, the instability of government tax revenue leads to an instability of both the public investment and government consumption, and finally, reduces the level of public investment. Secondly, foreign aid inflows appear to be an effective insurance mechanism against the instability of tax revenue by lowering the sensitivity of public investment with respect to tax revenue shocks. Finally, the reliance on domestic indirect taxation-based systems seems more stabilizing than the dependency on trade tax revenue.

Keywords: foreign aid; Sub-Saharan Africa; Tax Instability; Tax Composition; public spending (search for similar items in EconPapers)
Date: 2011-01-05
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00552230
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Citations: View citations in EconPapers (17)

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Related works:
Working Paper: Tax Revenue Instability in sub-Saharan Africa: Consequences and Remedies (2013)
Journal Article: Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies (2012)
Working Paper: Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies (2012)
Working Paper: Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies (2011)
Working Paper: Tax Revenue Instability in Sub-Saharan Africa: Consequences and Remedies (2010)
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