dc.contributor.author | Clist, Paul | |
dc.date.accessioned | 2016-03-23T14:14:06Z | |
dc.date.available | 2016-03-23T14:14:06Z | |
dc.date.issued | 2014-09 | |
dc.identifier.citation | Clist, P. (2014) Foreign Aid and Domestic Taxation: Multiple Sources, One Conclusion. ICTD Working Paper 20. Brighton: IDS. | en |
dc.identifier.isbn | 978-1-78118-190-4 | |
dc.identifier.uri | https://opendocs.ids.ac.uk/opendocs/handle/20.500.12413/10251 | |
dc.description | development aid; tax; fiscal response; replication; MIMIC model. | en |
dc.description.abstract | There are genuine concerns that foreign aid may crowd out domestic tax revenue. In the
short run this would have negative consequences for the recipient government's revenue,
and over a longer period could corrode governance through breaking the social contract. In
recent years, two papers have presented empirical results that suggest while aid loans are
free from such concerns, aid grants do crowd out tax revenue. Previous research showed
that the results from the first paper, Gupta et al. (2004), did not survive the inclusion of more
recent data or a minimal lag on aid variables (a simple way of reducing concerns of
endogeneity). This article deals with the second contribution, Benedek et al. (2012), and
finds that the results cannot be replicated. Furthermore, they suffer from serious problems
resulting from a dependent variable comprised of several incompatible data sources and
definitions. A variety of econometric techniques are used, including new data, with the weight
of evidence pointing to a modest but positive effect from 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. | en |
dc.description.sponsorship | DfID, NORAD | en |
dc.language.iso | en | en |
dc.publisher | Institute of Development Studies | en |
dc.relation.ispartofseries | ICTD Working Paper;20 | |
dc.rights | Foreign Aid and Domestic Taxation: Multiple Sources, One Conclusion
Paul Clist
ICTD Working Paper 20
First published by the Institute of Development Studies in September 2014
© Institute of Development Studies 2014
ISBN: 978-1-78118-190-4
A catalogue record for this publication is available from the British Library.
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Available from:
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dc.rights.uri | http://www.ids.ac.uk/files/dmfile/IDSOpenDocsStandardTermsOfUse.pdf | en |
dc.subject | Economic Development | en |
dc.title | Foreign Aid and Domestic Taxation: Multiple Sources, One Conclusion | en |
dc.type | IDS Working Paper | en |
dc.rights.holder | Institute of Development Studies | en |
dc.identifier.externaluri | http://www.ictd.ac/ju-download/2-working-papers/13-foreign-aid-and-domestic-taxation-multiple-sources-one-conclusion | |