Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/190025
Authors: 
Tagem, Abrams M. E.
Year of Publication: 
2017
Series/Report no.: 
WIDER Working Paper 2017/180
Abstract: 
The main argument of this paper is that there is considerable heterogeneity in the way aid can shape tax performance in developing countries: through behavioural effects, donor conditionality, recipient policy reform and technical assistance; and these effects are country-specific. We investigate these effects by applying the dynamic Common Correlated Effects Mean Group estimator to a dataset comprising 84 developing countries from 1980 to 2013. The following results ensued: aid and taxes comprise an equilibrium relation, with a positive long-run association between aid and taxes; causality runs from aid to taxes, suggesting that on average, changes in aid induce permanent changes in taxes.
Subjects: 
aid
taxation
tax reform
cointegration
common factor models
JEL: 
C23
E62
F35
O23
ISBN: 
978-92-9256-406-3
Document Type: 
Working Paper
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