Tax Revenue in Sub-Saharan Africa: Effects of Economic Policies and Corruption

September 1, 1998

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

An analysis of data for 39 sub-Saharan African countries during 1985–96 indicates that the variations in tax revenue-GDP ratios within this group are influenced by economic policies and the level of corruption. Namely, these ratios rise with declining inflation, implementation of structural reforms, rising human capital (a proxy for the provision of public services by the government), and declining corruption. The paper confirms that the tax revenue ratio rises with income, and that elements of a country’s tax base (such as the share of agriculture in GDP and the degree of openness) influence tax revenue.

Subject: Corruption, Crime, Foreign exchange, Human capital, Labor, Macrostructural analysis, Real effective exchange rates, Revenue administration, Structural reforms

Keywords: beta coefficient, Corruption, debt stock-GDP ratio, economic policy, grants-GDP ratio, Human capital, rate of inflation, Real effective exchange rates, revenue improvement, revenue-GDP ratio, Structural reforms, Sub-Saharan Africa, tax mobilization, tax ratio, tax revenue-GDP ratio, terms of trade, utility function, WP

Pages:
25
Volume:
1998
DOI:
https://doi.org/10.5089/9781451855685.001
Issue:
135
Series:
Working Paper No. 1998/135
Stock No:
WPIEA1351998
ISBN:
9781451855685
ISSN:
1018-5941

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