Study on the Vulnerability and Resilience Factors of Tax Revenues in Developing Countries

86 Pages Posted: 13 Dec 2013

See all articles by Christian von Haldenwang

Christian von Haldenwang

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE)

Oliver Morrissey

University of Nottingham - Development Economics

Maksym Ivanyna

World Bank

Ingo G. Bordon

University of Duisburg-Essen

Armin von Schiller

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE); Hertie School of Governance

Date Written: November 2013

Abstract

Beyond the general impact of shocks on economic growth there are specific effects of shocks on revenue systems that shape the capacity of governments to react to adverse external events and sustain development expenditure. These effects vary not only with the kinds of shock affecting the economies, but also with the characteristics of these economies (welfare levels, dependence on natural resources, etc.), the political and administrative capacity of states to react to changing situations, and the structure of the tax systems. Shocks do not only affect the level of tax collection, but also the stability and predictability of revenue. The latter is critical with regard to the adaptation to exogenous changes as well as the financial ability of states to recover from adverse external events.

This study presents an approach to empirically assess the impact of several kinds of shocks on revenue systems in a broad set of countries, and in developing countries in particular. The study thus contributes to an evidence-based policy of the European Commission aimed at strengthening the capacity of developing countries to absorb external shocks and thereby stabilising development expenditures. In particular, it provides evidence on the vulnerability to external shocks of tax revenues in developing countries and presents policy options to strengthen the resilience of tax systems.

Keywords: Taxation, revenue volatility, external shocks, developing countries

JEL Classification: E32, E61, E62, H20, O23, O57, Q38

Suggested Citation

von Haldenwang, Christian and Morrissey, Oliver and Ivanyna, Maksym and Bordon, Ingo G. and von Schiller, Armin, Study on the Vulnerability and Resilience Factors of Tax Revenues in Developing Countries (November 2013). Available at SSRN: https://ssrn.com/abstract=2366285 or http://dx.doi.org/10.2139/ssrn.2366285

Christian Von Haldenwang (Contact Author)

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 6
Bonn, 53113
Germany

Oliver Morrissey

University of Nottingham - Development Economics ( email )

University Park
Nottingham, NG8 1BB
United Kingdom
+44 (0)115 9515475 (Phone)
+44 (0)115 951 4159 (Fax)

Maksym Ivanyna

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Ingo G. Bordon

University of Duisburg-Essen ( email )

Lotharstrasse 1
Duisburg, 47048
Germany

HOME PAGE: http://www.makro.wiwi.uni-due.de/

Armin Von Schiller

Deutsches Institut für Entwicklungspolitik (DIE) - German Development Institute (DIE) ( email )

Tulpenfeld 4
Bonn, 53113
Germany

Hertie School of Governance ( email )

Schlossplatz 1
Berlin, 10178
Germany

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