On Taxation, Political Accountability and Foreign Aid: Empirics to a Celebrated Literature

South African Journal of Economics, 83(2), pp. 180-198 ( June, 2015)

25 Pages Posted: 23 Nov 2014 Last revised: 13 Jun 2015

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Date Written: May 22, 2014

Abstract

The Eubank (2012, JDS) findings on taxation, political accountability and foreign aid has had an important influence in academic and policy-making debates. Eubank has warned that his findings should not be generalized across Africa until they are backed by robust empirical evidence. This paper puts some empirical structure to the celebrated literature. The empirical evidence which is based on data from 53 African countries for the period 1996-2010 broadly confirms the Somaliland-based Eubank (2012) hypothesis that in the absence of foreign aid, the dependence of government on local tax revenues provides the leverage for better political governance.

Keywords: Foreign Aid; Political Economy; Development; Africa

JEL Classification: B20; F35; F50; O10; O55

Suggested Citation

Asongu, Simplice, On Taxation, Political Accountability and Foreign Aid: Empirics to a Celebrated Literature (May 22, 2014). South African Journal of Economics, 83(2), pp. 180-198 ( June, 2015). Available at SSRN: https://ssrn.com/abstract=2529441

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

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