scholarly journals Effect of Poverty Volatility on Tax Revenue Instability in Developing Countries

2020 ◽  
Author(s):  
SENA KIMM GNANGNON
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Generalized Method Of Moments ◽  
Low Income Countries ◽  
Tax Revenue ◽  
High Poverty ◽  
Full Sample ◽  
The Stability ◽  
The Empirical Analysis ◽  
Positive Effect

Abstract This paper complements the relatively few existing studies on the macroeconomic effects of poverty in developing countries, by investigating the effect of poverty volatility on tax revenue instability. The empirical analysis has been conducted using an unbalanced panel dataset of 112 developing countries covering the period 1980-2017, and primarily the two-step system Generalized Method of Moments technique. Findings have revealed that, on average, over the full sample, poverty volatility is associated with lower tax revenue instability. However, this reflects differentiated effect across countries, as low-income countries tend to experience a positive tax revenue instability effect of poverty volatility, while poverty volatility results in lower tax revenue instability in relatively advanced countries (among developing countries). Additionally, these outcomes hide the fact that poverty volatility exerts a higher positive effect on tax revenue instability in the context of increasing poverty rates. From a policy perspective, this analysis shows that it is essential for policymakers to dampen the volatility of poverty rates (notably in countries with high poverty rates) if they were to ensure the stability of tax revenue or reduce its instability, given the adverse effect of tax revenue instability on economic growth.

scholarly journals Why Do Developing Countries Tax So Little?

2014 ◽  
Vol 28 (4) ◽  
pp. 99-120 ◽  
Author(s):  
Timothy Besley ◽  
Torsten Persson
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
News Media ◽  
Weak Sense ◽  
Cultural Factors ◽  
Low Income Countries ◽  
Tax Revenue ◽  
Weak Institutions ◽  
Social And Cultural Factors ◽  
A Share

Low-income countries typically collect taxes of between 10 to 20 percent of GDP while the average for high-income countries is more like 40 percent. In order to understand taxation, economic development, and the relationships between them, we need to think about the forces that drive the development process. Poor countries are poor for certain reasons, and these reasons can also help to explain their weakness in raising tax revenue. We begin by laying out some basic relationships regarding how tax revenue as a share of GDP varies with per capita income and with the breadth of a country's tax base. We sketch a baseline model of what determines a country's tax revenue as a share of GDP. We then turn to our primary focus: why do developing countries tax so little? We begin with factors related to the economic structure of these economies. But we argue that there is also an important role for political factors, such as weak institutions, fragmented polities, and a lack of transparency due to weak news media. Moreover, sociological and cultural factors—such as a weak sense of national identity and a poor norm for compliance—may stifle the collection of tax revenue. In each case, we suggest the need for a dynamic approach that encompasses the two-way interactions between these political, social, and cultural factors and the economy.

scholarly journals Does Poverty deter Foreign Direct Investment flows to Developing Countries?

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Foreign Direct Investment ◽  
Low Income ◽  
Direct Investment ◽  
Low Income Countries ◽  
Fdi Inflows ◽  
Full Sample ◽  
Linear Effect ◽  
Non Linear Effect ◽  
Non Linear

The present paper investigates the effect of poverty on foreign direct investment (FDI) inflows in developing countries. It complements the important extant literature on the effect of FDI inflows on poverty by examining the issue the other way around. The analysis is conducted using a sample of 117 countries over the period 1980-2017, and the two-step system Generalized Methods of Moments (GMM) technique. It has relied on two indicators of poverty, namely poverty headcount ratio and poverty gap. Findings indicate that over the full sample, poverty influences negatively FDI inflows, including through its adverse effect on human capital (that is, both education and health). Unsurprisingly, low-income countries (considered as poorest countries in the full sample) experience a higher negative effect of poverty on FDI inflows than other countries. On another note, participation in international trade matters for the effect of poverty on FDI inflows. In fact, an increase in poverty levels results in lower FDI inflows in countries that experience low workers' productivity, a less developed financial sector, and a low level of infrastructure development. Furthermore, the effect of poverty on FDI inflows does not depend on the prevailing economic growth rate. Finally, the analysis has revealed the existence of a non-linear effect of poverty on FDI inflows for the poverty headcount indicator, but not for the poverty gap indicator. The non-linear effect of poverty headcount on FDI inflows is such that a rise in poverty headcount ratio results in lower FDI inflows, but an additional increase in poverty more than further discourages FDI inflows. The conclusion discusses the implications of these findings.

scholarly journals Export Product Diversification, Poverty and Tax Revenue in Developing Countries

2020 ◽  
Author(s):  
Sena Kimm Gnangnon
Keyword(s):  
Developing Countries ◽  
Product Diversification ◽  
Tax Revenue ◽  
Product Concentration ◽  
Full Sample ◽  
Generalized Methods Of Moments ◽  
Methods Of Moments ◽  
The Empirical Analysis ◽  
Export Product ◽  
Export Product Diversification

The current paper has examined the effect of both export product diversification and poverty on non-resource tax revenue in developing countries. The analysis has used an unbalanced panel dataset of 111 countries over the period 1980-2014. Based on the Blundell and Bond two-step system Generalized Methods of Moments technique, the empirical analysis has shown interesting findings. Export product concentration and poverty influence negatively non-resource tax revenue over the full sample, but this effect varies across countries in the sample. Furthermore, the effect of export product diversification on non-resource tax revenue performance depends on the level of poverty. It appears that export product diversification influences positively non-resource tax revenue performance in countries that experience lower poverty rates. From a policy perspective, these findings show that policies in favour of diversifying export product baskets and reducing poverty would contribute to enhancing non-resource tax revenue performance in developing countries.

‘Funk Money’: The End of Empires, The Expansion of Tax Havens, and Decolonization as an Economic and Financial Event*

2020 ◽  
Vol 249 (1) ◽  
pp. 213-249
Author(s):  
Vanessa Ogle
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Low Income Countries ◽  
Full Detail ◽  
Tax Revenue ◽  
Portfolio Investment ◽  
Tax Rates ◽  
Tax Havens ◽  
Tax Haven ◽  
White Settlers

Abstract This article explores the question of what happened to European assets in the process of decolonization. It argues that decolonization created a money panic of sorts that led white settlers, businessmen, and officials to seek to liquidate assets they owned and move funds out of the colonial world. Instead of being repatriated to metropolitan countries with high tax rates and exchange controls, money moved to tax havens. Decolonization thus provided an important share of early postwar tax haven business in a period when tax havens and offshore finance expanded during the 1950s and 1960s. In turn, the withdrawal of Euro-American investments from the decolonizing world set the stage for the politics of development and modernization in the coming decades. Ironically, the outflow of funds during decolonization and the subsequent return of some funds in restructured form as investments by multinational and other companies soon caused difficulties in newly independent developing countries. Companies soon found ways to rebook profits to have occurred in a tax haven rather than in the developing world, thus depriving low-income countries from tax revenue. The withdrawal of Euro-American investments from the colonial world during decolonization moreover had implications for the growth of portfolio investment, as funds removed from colonies were often invested through a tax haven onwards in US securities. All in all, decolonization was an economic and financial event that is only beginning to emerge in full detail.

scholarly journals The Bad Effects Caused by Policy Prescription and Financial Assistance by IMF on Developing Countries

2021 ◽  
pp. 172-177
Keyword(s):  
Developing Countries ◽  
Low Income ◽  
Developed Countries ◽  
Low Income Countries ◽  
Absolute Poverty ◽  
The Social ◽  
The Impact ◽  
Positive Effect ◽  
Policy Prescription ◽  
The Imf

Actually in some cases, the IMF has a little positive effect on developing economics while has a vast bad effect on all developing economics. The main purpose of the study is to examine the impact of IMF on developing countries. The globalization of the world economy gives rise to large global inequalities. The inequalities are responsible for increasing absolute poverty and starvation. Low-income countries are suffering from financial crises to reduce their absolute poverty and starvation. So they have to depend on IMF and various financial institutions. But the IMF policies are heavily criticized and unhelpful. The IMF sometimes led to an increased dependency of developing countries upon developed countries. The social sectors of developing countries such as the health and education sectors are most affected by these policies. So these policies increase poverty and underdevelopment of the developing world.

scholarly journals Financial Inclusion and Economic Growth: Empirical Evidence from Selected Developing Economies

2020 ◽  
Vol 6 (1) ◽  
pp. 179-203
Author(s):  
Noor ul Ain ◽  
Samina Sabir ◽  
Nabila Asghar
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Low Income ◽  
Developing Economies ◽  
Generalized Method Of Moments ◽  
Political Stability ◽  
Income Group ◽  
Financial Inclusion ◽  
Institutional Variables ◽  
Positive Effect

Financial inclusion is a tool used to enhance economic growth, alleviate poverty, create employment and reduce income inequality in developing countries through providing affordable financial goods and services to low income group through financial institutions. This study analyzes the relationship among financial inclusion, entrepreneurship, institutions and economic growth for 33 developing countries over time 2004-2016 using Generalized Method of Moments (GMM). The variables of financial inclusion, entrepreneurship and institutions are incorporated in Solow growth model through total factor productivity. Empirical results show that financial inclusion has positive effect on economic growth while entrepreneurship has negative but significant effect on economic growth. Whereas some institutional variables like rule of law and political stability have negative and other institutional variables like control of corruption and government effectiveness have positive effect on economic growth.

scholarly journals The Rotavirus Vaccine Landscape, an Update

Pathogens ◽  
2021 ◽  
Vol 10 (5) ◽  
pp. 520
Author(s):  
Roberto Cárcamo-Calvo ◽  
Carlos Muñoz ◽  
Javier Buesa ◽  
Jesús Rodríguez-Díaz ◽  
Roberto Gozalbo-Rovira
Keyword(s):  
Developing Countries ◽  
Mortality Rate ◽  
Low Income ◽  
State Of The Art ◽  
The State ◽  
Cold Chain ◽  
Low Income Countries ◽  
Rotavirus Vaccine ◽  
Oral Vaccines

Rotavirus is the leading cause of severe acute childhood gastroenteritis, responsible for more than 128,500 deaths per year, mainly in low-income countries. Although the mortality rate has dropped significantly since the introduction of the first vaccines around 2006, an estimated 83,158 deaths are still preventable. The two main vaccines currently deployed, Rotarix and RotaTeq, both live oral vaccines, have been shown to be less effective in developing countries. In addition, they have been associated with a slight risk of intussusception, and the need for cold chain maintenance limits the accessibility of these vaccines to certain areas, leaving 65% of children worldwide unvaccinated and therefore unprotected. Against this backdrop, here we review the main vaccines under development and the state of the art on potential alternatives.

scholarly journals Tax Revenue Mobilization Episodes in Emerging Markets and Low-Income Countries: Lessons from a New Dataset

2018 ◽  
Vol 18 (234) ◽  
pp. 1 ◽  
Author(s):  
Bernardin Akitoby ◽  
Anja Baum ◽  
Clay Hackney ◽  
Olamide Harrison ◽  
Keyra Primus ◽  
...  
Keyword(s):  
Emerging Markets ◽  
Low Income ◽  
Low Income Countries ◽  
Tax Revenue

IMPACTS OF FINANCIAL INCLUSION ON POVERTY AND INCOME INEQUALITY IN DEVELOPING ASIA

2021 ◽  
pp. 1-17
Author(s):  
WARATTAYA CHINNAKUM
Keyword(s):  
Developing Countries ◽  
Income Inequality ◽  
Low Income ◽  
Financial Services ◽  
Trade Openness ◽  
Generalized Method Of Moments ◽  
Principal Component ◽  
Financial Inclusion ◽  
Poor Households ◽  
Low Income Groups

This study investigates the impacts of financial inclusion on poverty and income inequality in 27 developing countries in Asia during 2004–2019 based on a composite financial inclusion index (FII) constructed using principal component analysis (PCA). The generalized method of moments (GMM) was employed for the estimation. The results show that financial inclusion can influence the reduction in both poverty and income inequality. The empirical findings also reveal the contribution of such control variables as economic growth in decreasing income disparity and trade openness in helping improve the standard of living of poor households despite its tendency to co-vary with income inequality. The present empirical evidence supporting the role of financial inclusion in reducing poverty and income inequality in developing countries has led to a policy implication that financial sector development should focus on the availability, usage, and depth of credit to cover all poor households or low-income groups to help improve their access to financial services, enable them to increase their income, and reduce the income gap between poor and rich households.

Sign in / Sign up

Export Citation Format

Share Document