Political Competition and Tax Revenues in Developing Countries. (13th March 2018) - Yogo, Urbain T.
Abstract: Building on the literature of the political economy of taxation, this article explores the relationship between political competition and tax revenues using a sample of 89 developing countries from 1988 to 2010. Owing to the inertia of tax variables, we estimate a dynamic panel data model using the Blundell and Bond two‐step System‐general method of moments. The analysis led to the following results: political competition positively and significantly affects total tax revenues. However, this general pattern slightly differs across the type of taxes; and the net effect of political competition on tax revenues is negative for countries that have adopted fiscal rules. © 2018 UNU‐WIDER. Journal of International Development published by John Wiley & Sons, Ltd.