Does Conditionality in IMF-Supported Programs Promote Revenue Reform?

33 Pages Posted: 31 Dec 2014

See all articles by Ernesto Crivelli

Ernesto Crivelli

International Monetary Fund (IMF)

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department

Date Written: November 2014

Abstract

This paper studies whether revenue conditionality in Fund-supported programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993-2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.

Keywords: Fund-supported adjustment programs, Conditionality, Low-income developing countries, Tax revenues, Tax collection, Revenue administration, Tax reforms, structural conditionality, taxes, goods, tax policy, transactions, personal income, income tax, international transactions

JEL Classification: C33, E62, F33, H20

Suggested Citation

Crivelli, Ernesto and Gupta, Sanjeev, Does Conditionality in IMF-Supported Programs Promote Revenue Reform? (November 2014). IMF Working Paper No. 14/206, Available at SSRN: https://ssrn.com/abstract=2544204

Ernesto Crivelli (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Sanjeev Gupta

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
46
Abstract Views
473
PlumX Metrics