Foreign aid and domestic taxation: Multiple sources, one conclusion

Clist, Paul ORCID: (2016) Foreign aid and domestic taxation: Multiple sources, one conclusion. Development Policy Review, 34 (3). pp. 365-383. ISSN 0950-6764

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Influential research has argued that foreign aid displaces domestic tax revenue when it is given in the form of grants. These claims are based on data that are deeply problematic: several different sources are amalgamated into one dataset, with no apparent checks on compatibility. In this article, a variety of econometric strategies are used to overcome these issues of data quality. The weight of evidence points to a modest but positive effect from all foreign aid on domestic tax revenue. Fears over a negative effect for aid grants appear unwarranted, and are accounted for by the inappropriate use of data or endogeneity concerns.

Item Type: Article
Uncontrolled Keywords: foreign aid,tax revenue,data quality,mimic model
Faculty \ School: Faculty of Social Sciences > School of International Development
Depositing User: Pure Connector
Date Deposited: 22 Mar 2016 09:09
Last Modified: 21 Oct 2022 01:12
DOI: 10.1111/dpr.12154

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