Taxation, foreign aid and political governance in Africa

Asongu, Simplice and Odhiambo, Nicholas (2019): Taxation, foreign aid and political governance in Africa. Forthcoming in: Forthcoming: European Journal of Comparative Economics

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Foreign Aid; Political Economy; Development; Africa
• Subjects: B - History of Economic Thought, Methodology, and Heterodox Approaches > B2 - History of Economic Thought since 1925 > B20 - General; F - International Economics > F3 - International Finance > F35 - Foreign Aid; F - International Economics > F5 - International Relations, National Security, and International Political Economy > F50 - General; O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O10 - General; O - Economic Development, Innovation, Technological Change, and Growth > O5 - Economywide Country Studies > O55 - Africa

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