POLITICAL COMPETITION AND TAX
REVENUES IN DEVELOPING COUNTRIES
URBAIN T. YOGO
and MARTINE M. NGO NJIB
University of Yaoundé 2, Cameroon
University of Sunderland, UK
Abstract: Building on the literature of the political economy of taxation, this article explores the
relationship between political competition and tax revenues using a sample of 89 developing countries
from 1988 to 2010. Owing to the inertia of tax variables, we estimate a dynamic panel data model
using the Blundell and Bond two-step System-general method of moments. The analysis led to the
following results: political competition positively and signiﬁcantly affects total tax revenues. However,
this general pattern slightly differs across the type of taxes; and the net effect of political competition
on tax revenues is negative for countries that have adopted ﬁscal rules. © 2018 UNU-WIDER. Journal
of International Development
published by John Wiley & Sons, Ltd.
Keywords: level of tax revenues; political competition; volatility of tax revenues
JEL Classiﬁcation: C72; D72; H21
Strengthening the mobilization of domestic resources is viewed as a condition of economic
growth and sustainable development. Over the last two decades, developing countries have
witnessed a steady increase in tax revenues. According to new ﬁgures released by the
International Centre for Tax and Development (ICTD), among developing countries,
non-resources taxes increased from 13 per cent of gross domestic product (GDP) in
1990 to 16 per cent in 2009. This progress in the mobilization of domestic revenues is
consistent across developing regions and mirrored by the evolution of non-resources tax
collection that has also improved in sub-Saharan Africa over this period (Prichard,
Cobham, & Goodall, 2014).
While this progress in tax revenue collection may reﬂect a constant investment in tax
reforms [introduction of value added taxes (VAT), adoption of advanced tax
*Correspondence to: Urbain T. Yogo, University of Yaoundé 2, Cameroon.
© 2018 UNU-WIDER. Journal of International Development published by John Wiley & Sons, Ltd.
Journal of International Development
J. Int. Dev. 30, 302–322 (2018)
Published online in Wiley Online Library
(wileyonlinelibrary.com) DOI: 10.1002/jid.3349
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