Promoting female economic inclusion for tax performance in Sub-Saharan Africa

Asongu, Simplice and Adegboye, Alex and Nnanna, Joseph (2020): Promoting female economic inclusion for tax performance in Sub-Saharan Africa. Published in: Economic Analysis and Policy , Vol. 69, No. March (March 2021): pp. 159-170.

Abstract

This study explores whether female economic inclusion enhances tax performance in a sample of 48 countries in Sub-Saharan Africa from 2000 to 2018. The study’s empirical evidence is based on the generalized method of moments in order to account for endogeneity concerns. Three tax performance measurements are used, notably, total taxes revenue excluding social contributions, reported tax revenue derived from natural resources sources, and total non-resource tax revenue. Three female inclusion indicators are used, namely, female employment in industry, female labour force participation, and female employment. The following empirical evidences are documented; (i) There is a negative net effect from the enhancement of female employment in the industry on the total tax revenue. (ii) There is a positive net effect of female employment in the industry on the non-resource taxes. An extended threshold analysis is performed to establish the critical masses that could further influence tax performance positively. The following thresholds are established. (i) a minimum of 15.35 “employment in industry, female (% of female employment)” for the total tax revenue and (ii) a maximum of 23.75 “employment in industry, female (% of female employment)” for the non-resource tax revenue. These critical masses are crucial for sustainable development because, below or beyond these thresholds, policy makers should complement the female economic inclusion with other economic measures designed to improve tax performance in Sub-Saharan Africa.

• Item Type: MPRA Paper
• Language: English
• Keywords: Gender, economic inclusion, tax performance, sustainable development, Africa
• Subjects: H - Public Economics > H2 - Taxation, Subsidies, and Revenue > H20 - General; H - Public Economics > H7 - State and Local Government ; Intergovernmental Relations > H71 - State and Local Taxation, Subsidies, and Revenue; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I21 - Analysis of Education; I - Health, Education, and Welfare > I2 - Education and Research Institutions > I28 - Government Policy; J - Labor and Demographic Economics > J0 - General > J08 - Labor Economics Policies

References

Adam, A., Kammas, P., & Lagou, A. (2013). The effect of globalization on capital taxation: What have we learned after 20years of empirical studies? Journal of Macroeconomics. https://doi.org/10.1016/j.jmacro.2012.09.003

Addison, T., & Levin, J. (2011). The determinants of tax revenue in Sub-Saharan Africa. Journal of International Development, 1–19.

Ajide, K. B, & Raheem, I. D., (2016a). Institutions-FDI Nexus in ECOWAS Countries, Journal of African Business, 17(3), 319-341.

Ajide, K. B, & Raheem, I. D., (2016b). The Institutional Quality Impact on Remittances in the ECOWAS Sub-Region, African Development Review, 28(4), 462–481.

Andrejovská, A., Puliková, V., Andrejovská, A., & Puliková, V. (2018). Tax Revenues in the Context of Economic Determinants, Montenegrin Journal of Economics, 14(1), 133–141. https://doi.org/10.14254/1800-5845/2018.14-1.10

Asongu S. A. & De Moor, L., (2017). Financial globalisation dynamic thresholds for financial development: evidence from Africa, European Journal of Development Research, 29(1), 192–212.

Asongu, S. A., Efobi, U. R., Tanankem, B. V. & Osabuohien, E. S.(2020a). Globalization and female economic participation in Sub-Saharan Africa, Gender Issues, 37(1), 61–89.

Asongu, S. A., & Jellal, M. (2016). Foreign aid fiscal policy: theory and evidence. Comparative Economic Studies, 58(2), pp. 279-314.

Asongu, S. A., & le Roux, S. (2017). Enhancing ICT for inclusive human development in Sub-Saharan Africa. Technological Forecasting & Social Change, 118(April 2017), 44–54. https://doi.org/10.1016/j.techfore.2017.09.022

Asongu, S. A., & le Roux, S., (2019). Understanding Sub-Saharan Africa’s Extreme Poverty Tragedy, International Journal of Public Administration, 42(6), 457-467.

Asongu, S. A., Nnanna, J., & Acha-Anyi, P. N. (2020). Inequality and gender economic inclusion: The moderating role of financial access in Sub-Saharan Africa. Economic Analysis and Policy, 65, 173–185. https://doi.org/10.1016/j.eap.2020.01.002

Asongu, S. A., & Nwachukwu, J. C. (2018). Educational quality thresholds in the diffusion of knowledge with mobile phones for inclusive human development in sub-Saharan Africa. Technological Forecasting and Social Change, 129, 164–172. https://doi.org/10.1016/J.TECHFORE.2018.01.004

Asongu, S. A., & Odhiambo, N. M., (2018). ICT, Financial Access and Gender Inclusion in the Formal Economic Sector: Evidence from Africa, African Finance Journal,20(2), 46-66.

Asongu, S. A., &Odhiambo, N. M. (2019). How enhancing information and communication technology has affected inequality in Africa for sustainable development: An empirical investigation. Sustainable Development,27(4), 647-656. https://doi.org/10.1002/sd.1929

Asongu, S. A., &Odhiambo, N. M. (2020a). Inequality thresholds , governance and gender economic inclusion in sub-Saharan Africa. International Review of Applied Economics, 34(1), 94-114. https://doi.org/10.1080/02692171.2019.1645817

Asongu, S. A., &Odhiambo, N. M. (2020b). How enhancing gender inclusion affects inequality: Thresholds of complementary policies for sustainable development. Sustainable Development, 28(1), 132–142. https://doi.org/10.1002/sd.1977

Asongu, S. A., &Odhiambo, N. M. (2020c). Remittances, the diffusion of information and industrialisation in Africa. Contemporary Social Science, 15(1), 98–117. https://doi.org/10.1080/21582041.2019.1618898

Asongu, S. A, & Nwachukwu, J. (2016). The Role of Governance in Mobile Phones for Inclusive Human Development in Sub-Saharan Africa. Technovation, 55-56 (September–October), 1–13. https://doi.org/10.1016/j.technovation.2016.04.002

Asongu, S. A., Tchamyou, V. S., Minkoua, N, J. R., Asongu, N., & Tchamyou, N. P., (2018). Fighting terrorism in Africa: Benchmarking policy harmonization, Physica A: Statistical Mechanics and its Applications, 492(February), 1931-1957.

Arellano M.&Bover O (1995) Another look at the instrumental variable estimation oferror components models. J Econ. 68(1), 29–52. https:// doi.org/10.1016/0304-4076(94)01642-D

Bardhan, K., &Klasen, S. (1997). UNDP’s Gender-Related Indices-A Critical Review. King’s College, Cambridge. https://core.ac.uk/download/pdf/6224379.pdf (08/10/2020).

Baunsgaard, T., & Keen, M. (2010). Tax revenue and (or?) trade liberalization. Journal of Public Economics, 94(9–10), 563–577. https://doi.org/10.1016/j.jpubeco.2009.11.007

Bayraktar, N., & Fofack, H., (2018). A Model for Gender Analysis with Informal Productive and Financial Sectors, Journal of African Development, 20(2), 1-20.

Barnett, K. & Grown, C., (2004). Gender impacts of government revenue collection: the case of taxation. Londres: Commonwealth Secretariat.http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.577.182&rep=rep1&type=pdf (Accessed: 07/11/2020).

Bird, R. M., Martinez-vazquez, J., & Torgler, B. (2007). Tax Effort : The Impact of Corruption , Voice and Accountability.

Bongomin, G. O. C., Ntayi, J. M., Munene J. C., & Malinga, C. A., (2018). Mobile Money and Financial Inclusion in Sub-Saharan Africa: the Moderating Role of Social Networks, Journal of African Business,18(4), 361-384.

Breu, F., Guggenbichler, S., & Wollmann, J. (2008). FDI and taxation. Vasa, 10(65), 64–82. https://doi.org/10.1108/14770021111116142

Castro, G. Á., & Camarillo, D. B. R. (2014a). Determinants of tax revenue in OECD countries over the period 2001-2011. Contaduria y Administracion, 59(3), 35–59. https://doi.org/10.1016/S0186-1042(14)71265-3

Castro, G. Á., & Camarillo, D. B. R. (2014b). Determinants of tax revenue in OECD countries over the period 2001-2011. Contaduria y Administracion, 59(3), 35–59.

Costantini, M., & Lupi, C., (2005). Stochastic Convergence among European Economies. Economics Bulletin, 3(38), 1-17.

Crivelli, E. & Gupta, S. (2014). Resource blessing, revenue curse? Domestic revenue effort in resource-rich countries. Eur. J. Polit. Econ. 35, 88–101.

Drummond, P., Daal, W., Srivastava, N. & Oliveira, L. E. (2012). Mobilizing Revenue in Sub-Saharan Africa: Empirical Norms and Key Determinants. IMF Working No WP/12/108, International Monetary Fund, Washington DC.

Efobi, U., Tanankem, B., &Asongu, S., (2018). Female Economic Participation with Information and Communication Technology Advancement: Evidence from Sub‐Saharan Africa, South African Journal of Economics, 86(2), 231-246.

Ellis, A., Blackden, M., Cutura, J., MacCulloch, F., & Seebens, H., (2007). “Gender and Economic Growth in Tanzania: Creating Opportunities for Women”, Washington: The World Bank.

Elu, J., (2018). Gender and Science Education in Sub-Saharan Africa-Keynote address at the African Development Bank/African Finance and Economic Association Luncheon, Chicago, January 7, 2017, Journal of African Development, 20(2), 105-110.

Fasoranti, M.M. (2013). Tax productivity and economic growth.Lorem Journal of Business and Economics, 1 (1), 1-10.

Fenochietto, R. & Pessino, C. (2013). Understanding Countries' Tax Effort. IMF Working Paper, WP 13/244, International Monetary Fund, Washington DC.

Food and Agricultural Organization – FAO (2011), Women in Agriculture: Closing the GenderGap for Development, Rome: FAO.

Fosu, A. K. (2017). Growth, inequality, and poverty reduction in developing countries: Recent global evidence. Research in Economics, 71(2), 306–336. https://doi.org/10.1016/j.rie.2016.05.005

Franco, A., Malhotra, N., & Simonovits, G., (2014). “Publication Bias in the Social Sciences: Unlocking the File Drawer”, Science, 345(6203), pp. 1502-1505.

Gamze, O.-Y. (2019). Financial inclusion and tax revenue. Central Bank Review, 19, 107–113.

Gnangnon, S. K., & Brun, J. F. (2018a). Impact of bridging the Internet gap on public revenue mobilization. Information Economics and Policy, 43, 23–33. https://doi.org/10.1016/j.infoecopol.2018.04.001

Gnangnon, S. K., & Brun, J. F. (2018b). Is the impact of development aid on government revenue sustainable? An empirical assessment. Quarterly Review of Economics and Finance, 67, 311–325. https://doi.org/10.1016/j.qref.2017.07.009

Grown, C., & Valodia, I. eds., (2010). Taxation and Gender Equity: A comparative analysis of direct and indirect taxes in developing and developed countries. London: Routledge.

Guner, N., Lopez-Daneri, M., & Ventura, G. (2016). Heterogeneity and Government revenues: Higher taxes at the top? Journal of Monetary Economics, 80, 69–85. https://doi.org/10.1016/j.jmoneco.2016.05.002

Hazel, M., (2010). Poverty among Women in Sub-Saharan Africa: A Review of Selected Issues, Journal of International Women’s Studies, 11(4), pp. 50-72.

Kavya, T. B., & Shijin, S. (2020). Economic development, financial development, and income inequality nexus. Borsa Istanbul Review. https://doi.org/10.1016/j.bir.2019.12.002

Klasen, S. &Lamanna, F. (2009). The Impact of Gender Inequality in Education and Employment on Economic Growth: New Evidence for a Panel of Countries. Feminist Economics, 15(3), 91-132.

Luo, C., Yang, X., Li, S., & Feldman, M. W., (2017). Love or Bread? What Determines Subjective Wellbeing Among Left-Behind Women in Rural China?Gender Issues, 34(1), 23–43.

Macek, R. (2014). The impact of taxation on economic growth: Case study of OECD countries. Review of Economic Perspectives. https://doi.org/10.1515/revecp-2015-0002

Mannah-Blankson, T., (2018). Gender Inequality and Access to Microfinance: Evidence from Ghana, Journal of African Development, 20(2), 21-33.

Mara, E. R. (2015). Determinants of Tax Havens. Procedia Economics and Finance, 32(15), 1638–1646. https://doi.org/10.1016/s2212-5671(15)01490-2.

Marquez, B. A., (2017). The Effects of Hacienda Culture on the Gendered Division of Labor within the Charro Community, Gender Issues, 34(1), 3–22.

Martorano, B. (2016). Taxation a nd Inequality in Developing Countries, (September), 1–22.

Matei, A., & Drumasu, C. (2015). Corporate Governance and Public Sector Entities. Procedia Economics and Finance, 26(15), 495–504. ht tps://doi.org/10.1016/S2212-5671(15)00879-5

Mauricio, V., & Rodríguez, C. (2018). Tax determinants revisited . An unbalanced data panel analysis. Journal of Applied Economics, 21(1), 1–24. https://doi.org/10.1080/15140326.2018.1526867

Mawejje, J. (2019). Natural resources governance and tax revenue mobilization in sub saharan Africa: The role of EITI. Resources Policy, 62(February), 176–183. https://doi.org/10.1016/j.resourpol.2019.04.001

Meniago, C., & Asongu. S. A., (2018). Revisiting the Finance-Inequality Nexus in a Panel of African Countries.Research in International Business and Finance, 46 (December), 399-419.

Moras, A., (2017). “This Should be My Responsibility”: Gender, Guilt, Privilege and Paid Domestic Work,Gender Issues, 34(1), 44–66.

Moore, M. (1998). Death without taxes: Democracy, state capacity andaid dependence in the Fourth World. In M. Robinson, & G. White(Eds.), The democratic development state: Politics and institutionalreform (pp. 67–88). Oxford: Oxford University Press.

Morsy, H., (2020). Access to finance – Mind the gender gap, The Quarterly Review of Economics and Finance. DOI: 10.1016/j.qref.2020.02.005.

Mutti, J., & Grubert, H. (2004). Empirical asymmetries in foreign direct investment and taxation. Journal of International Economics, 62(2), 337–358. https://doi.org/10.1016/S0022-1996(03)00016-3

Nanziri L.E. (2020). Women, Inclusive Finance and the Quality of Life: Evidence from Zambia. In: Konte M., Tirivayi N. (eds) Women and Sustainable Human Development. Gender, Development and Social Change. Palgrave Macmillan, Cham.https://doi.org/10.1007/978-3-030-14935-2_16

Narayan, P.K., Mishra, S., & Narayan, S., (2011). Do market capitalization and stocks traded converge? New global evidence. Journal of Banking and Finance, 35(10), 2771-2781.

OECD (2014). Tax revenues as a motor for sustainable development in Development Co-operation Report 2014: Mobilising Resources for Sustainable Development, OECD Publishing, Paris. DOI: https://doi.org/10.1787/dcr-2014-11-en

Osabuohien, E., Efobi U.R., Herrmann R. &Gitau, C.M. (2019). Female Labor Outcomes and Large-scale Agricultural Land Investments: Macro-Micro Evidence from Tanzania. Land Use Policy, 82, 716-728.

Ostry, M. J. D., Alvarez, J., Espinoza, M. R. A., &Papageorgiou, M. C. (2018). Economic gains from gender inclusion: New mechanisms, new evidence. International Monetary Fund, Washington.

Poterba, J. M. (2007). Income inequality and income taxation. Journal of Policy Modeling, 29(4), 623–633. https://doi.org/10.1016/j.jpolmod.2007.05.010

Ramani, S.V., Thurupalli, A., Medovarszki, T., Chattopadhyay, S., & Ravichandran, V., (2013), Women in the Informal Economy: Experiments in Governance from Emerging Countries, United Nations United Nations University Policy Brief Nos. 5, 2013, Tokyo.

Rice, L., & Barth, J. M., (2017). A Tale of Two Gender Roles: The Effects of Implicit and Explicit Gender Role Traditionalism and Occupational Stereotype on Hiring Decisions, Gender Issues, 34(1), 86-102.

Roodman D (2009a) A note on the theme of too many instruments. Oxf Bull Econ Stat. 71(1):135–158. https://doi.org/10.1111/j.1468-0084. 2008.00542.x

Roodman D (2009b) How to do xtabond2: an introduction to difference and system GMM in Stata. Stata J. 9(1):86–136.

Rosenberg, M. S., (2005). “The file-drawer problem revisited: a general weighted method for calculating fail-safe numbers in meta-analysis”, Evolution, 59(2), pp. 464-468.

Tandon, N., & Wegerif, M., (2013). Promises, Power and Poverty: Corporate Land Deals and Rural Women in Africa, OXFAM Policy Brief, 170(9), pp. 1-26.

Tchamyou, V. S., (2019).The Role of Information Sharing in Modulating the Effect of Financial Access on Inequality.Journal of African Business, 23(3), 317-338.

Tchamyou, V. S. (2020a). Education, Lifelong learning, Inequality and Financial access: Evidence from African countries.Contemporary Social Science, 15(1), 7-25.

Tchamyou, V. A., (2020b). Financial access, governance and the persistence of inequality in Africa: Mechanisms and policy instruments, Journal of Public Affairs: DOI: 10.1002/pa.2201.

Tchamyou, V. S., &Asongu, S. A., (2017). Information Sharing and Financial Sector Development in Africa, Journal of African Business, 18(1) 24-49.

Tchamyou, V. S., Asongu, S. A., & Odhiambo, N. M., (2019a). The role of ICT in modulating the effect of education and lifelong learning on income inequality and economic growth in Africa, African Development Review, 31(3), 261-274.

Tchamyou, V. S., Erreygers, G., &Cassimon, D., (2019b). Inequality, ICT and Financial Access in Africa, Technological Forecasting and Social Change,139 (February), 169-184.

Uduji, J. I. & Okolo-Obasi, E. N., (2018). Young rural women’s participation in the e-wallet programme and usage intensity of modern agricultural inputs in Nigeria, Gender, Technology and Development, 22(1), 59-81.

Uduji J. I, &Okolo-Obasi E. N. (2019). Corporate social responsibility initiatives in Nigeria and rural women livestock keepers in oil host communities. Social Responsibility Journal, 15(8), pp. 1008-1032.

Uduji J. I, &Okolo-Obasi E. N., ( 2020). Does corporate social responsibility (CSR) impact on development of women in small-scale fisheries of sub-Saharan Africa? Evidence from coastal communities of Niger Delta in Nigeria.Marine Policy. 118, August 2020.

Uduji J. I, Okolo-Obasi E. N., & Asongu, S. A., (2019). Corporate Social Responsibility and the role of Rural Women in Sustainable Agricultural Development in sub-Saharan Africa: Evidence from the Niger Delta in Nigeria, Sustainable Development, 27(4), 692-703.

United Nations (2013). A New Global Partnership: Eradicate Poverty and Transform Economies Through Sustainable Development, The Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda. http://www.un.org/sg/management/pdf/HLP_P2015_Report.pdf (Accessed: 07/12/2014).

Vancil-Leap, A., (2017). Resistance and Adherence to the Gendered Representations of School Lunch Ladies, Gender Issues, 34(1), 67-85.

Wang, J., Lin, J., Feng, K., Liu, P., Du, M., Ni, R., … Hubacek, K. (2019). Environmental taxation and regional inequality in China. Science Bulletin, 64(22), 1691–1699. https://doi.org/10.1016/j.scib.2019.09.017

World Bank (2018). Globally, Countries Lose $160 Trillion in Wealth Due to Earnings Gaps Between Women and Men, The World Bank. https://www.worldbank.org/en/news/press-release/2018/05/30/globally-countries-lose-160-trillion-in-wealth-due-to-earnings-gaps-between-women-and-men(Accessed: 03/01/2018).

Yohou, H.D. & Goujon, M. (2017). Assessing tax effort in developing countries: a proposal of a vulnerability-adjusted tax effort index.ferdi working paper No. 186, Fondation pour les Etudes etRecherchessur le Development International, Clemont-ferrand.