Foreign aid and domestic taxation: Multiple sources, one conclusion

Clist, Paul ORCID: https://orcid.org/0000-0001-9338-9446 (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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Abstract

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 Global Development (formerly School of International Development)
UEA Research Groups: Faculty of Social Sciences > Research Groups > Experimental Economics (former - to 2017)
Faculty of Social Sciences > Research Groups > Impact Evaluation
Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences
Faculty of Social Sciences > Research Groups > Behavioural and Experimental Development Economics
Depositing User: Pure Connector
Date Deposited: 22 Mar 2016 09:09
Last Modified: 23 Jul 2024 00:56
URI: https://ueaeprints.uea.ac.uk/id/eprint/57639
DOI: 10.1111/dpr.12154

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