Aid and tax revenue: Signs of a positive effect since the 1980s

Clist, Paul ORCID: https://orcid.org/0000-0001-9338-9446 and Morrissey, Oliver (2011) Aid and tax revenue: Signs of a positive effect since the 1980s. Journal of International Development, 23 (2). pp. 165-180. ISSN 0954-1748

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Abstract

This paper addresses the effect of aid loans and grants on tax effort using data for 82 developing countries over 1970–2005. We find no robust evidence for a negative effect of aid (grants or loans) on the tax/GDP ratio, other than a contemporaneous correlation, but find some evidence that the effect of grants on tax revenue is positive (if significant) since the mid 1980s and that grants tend to increase tax revenue over the medium term. For poor aid recipients, grants are to be preferred to loans because they create no debt and have no adverse fiscal effects.

Item Type: Article
Faculty \ School: Faculty of Social Sciences > School of Global Development (formerly School of International Development)
UEA Research Groups: Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Faculty of Social Sciences > Research Groups > Experimental Economics (former - to 2017)
Faculty of Social Sciences > Research Groups > Impact Evaluation
Faculty of Social Sciences > Research Groups > Behavioural and Experimental Development Economics
Depositing User: Julie Frith
Date Deposited: 05 Dec 2012 10:29
Last Modified: 15 Jun 2023 23:39
URI: https://ueaeprints.uea.ac.uk/id/eprint/40377
DOI: 10.1002/jid.1656

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