Corruption, governance and tax revenues in Africa

Business and Economic Horizons Pub Date : 2017-01-01 DOI:10.15208/BEH.2017.31

Manamba Epaphra, J. Massawe

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引用次数: 25

Abstract

In this paper we analyze the effects of institutional variables (corruption and governance), structural variables (per capita income, trade openness, inflation and share of agriculture in GDP), and policy variables (tax rate and tariff rate) on total tax revenues, direct taxes, indirect taxes and trade taxes using panel data set for 30 African countries over the 1996-2016 period. All estimates are based on fixed effects (FE) and random effects (RE) models. Using Hausman test, RE is earmarked to be the more preferred model in this paper. The RE regression results show that corruption and governance are two main determinants of tax revenues in Africa. While corruption has a significant negative effect on tax revenues, good governance measured in terms of government effectiveness, regulatory quality, rule of law and voice and accountability tends to raise tax revenue generation and in particular, indirect taxes. In the same vein, governance in form of political stability tends to have a very significant effect on direct taxes and international trade taxes. The basic intuition behind these results is that higher institutional capacity and lower corruption enhance tax revenue generation in the economy. Intriguingly, empirical results show that tariff rates tend to have a strong negative effect on total tax revenue but at the same time they have a strong positive effect on trade tax revenue. Moreover, trade openness tends to have a strong positive relationship with tax revenue. Overall, results suggest that to raise more tax revenue, governments should reduce corruption, improve tax and customs administration and raise revenues from tax categories that are less susceptible to corruption. They should as well enhance trade openness.

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非洲的腐败、治理和税收

在本文中，我们使用1996-2016年期间30个非洲国家的面板数据集，分析了制度变量(腐败和治理)、结构变量(人均收入、贸易开放度、通货膨胀和农业在GDP中的份额)和政策变量(税率和关税税率)对总税收、直接税、间接税和贸易税的影响。所有的估计都是基于固定效应(FE)和随机效应(RE)模型。通过Hausman检验，本文认为RE是更优选的模型。回归结果表明，腐败和治理是非洲税收收入的两个主要决定因素。虽然腐败对税收有重大负面影响，但以政府效率、监管质量、法治、话语权和问责制衡量的善政往往会增加税收，特别是间接税。同样，政治稳定形式的治理往往对直接税和国际贸易税产生非常重大的影响。这些结果背后的基本直觉是，更高的制度能力和更低的腐败会增加经济中的税收收入。有趣的是，实证结果表明，关税税率往往对总税收收入产生强烈的负面影响，但同时对贸易税收收入产生强烈的积极影响。此外，贸易开放往往与税收收入有很强的正相关关系。总体而言，结果表明，为了增加税收，政府应减少腐败，改善税收和海关管理，并从不易受腐败影响的税收类别中增加收入。加强贸易开放。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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Business and Economic Horizons ECONOMICS-

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期刊介绍： The Business and Economic Horizons (BEH) is an international peer-reviewed journal that publishes high quality theoretical, empirical, and review papers covering the broad spectrum of research in areas of economics, business, management, and finance. The journal aim is to bridge the gap between the theory and the observed data in these constantly developing domains. BEH Editorial Board welcomes the high-quality original research articles and review papers that verify the well-grounded and the emerging theories by employing the econometric, statistical methods or other relevant empirical methods in theoretical and applied economic analysis. BEH does not discriminate articles utilizing the non-mainstream approaches such as experimental research, institutional analysis, other variations of heterodox and developmental economic studies. Therefore, the submissions in any field of micro- and macroeconomics, business ethics, economic policy or finance are appropriate for this journal. We hope, the provided contributions will help to understand the contemporary challenges faced by the private and public sector and will establish an international forum of empirical research.