Taxation, foreign aid and political governance: figures to the facts of a celebrated literature

Asongu, Simplice (2014): Taxation, foreign aid and political governance: figures to the facts of a celebrated literature.

Abstract

This paper puts figures to the facts of Eubank (2012), a recently celebrated paper in the Journal of Development Studies. We investigate the underpinning Somaliland-based hypothesis that foreign aid dilutes the positive role of taxation on political governance. The assessment is based on 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 landlockeness. While the Eubank hypothesis is invalid in baseline Africa, low-income and English common law countries of the continent, we cannot conclude on its validity for other fundamental characteristics of development. Policy implications, caveats and future directions 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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