Taxation, Foreign Aid and Political Governance in Africa

Forthcoming: European Journal of Comparative Economics

34 Pages Posted: 23 May 2019

See all articles by Simplice Asongu

Simplice Asongu

African Governance and Development Institute

Nicholas Odhiambo

University of South Africa - Department of Economics

Date Written: April 23, 2019

Abstract

This study examines the hypothesis that foreign aid dilutes the positive role of taxation on political governance. The empirical evidence is based on the Generalised Method of Moments and 53 African countries for the period 1996-2010. For more policy options, the dataset is disaggregated into fundamental characteristics of African development based on income levels, legal origins, natural resources and landlockedness. While the hypothesis is invalid in baseline Africa, low income and English common law countries of the continent, the research cannot conclude on its validity for other fundamental characteristics of development. Policy implications, caveats and directions for future research are discussed.

Keywords: Foreign Aid; Political Economy; Development; Africa

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

Suggested Citation

Asongu, Simplice and Odhiambo, Nicholas, Taxation, Foreign Aid and Political Governance in Africa (April 23, 2019). Forthcoming: European Journal of Comparative Economics. Available at SSRN: https://ssrn.com/abstract=3376725

Simplice Asongu (Contact Author)

African Governance and Development Institute ( email )

P.O. Box 8413
Yaoundé, 8413
Cameroon

Nicholas Odhiambo

University of South Africa - Department of Economics ( email )

PO Box 392
Pretoria, 0003
South Africa

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