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Aid and domestic resource mobilisation with a focus on sub-Saharan Africa

Morrissey, Oliver

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Authors

OLIVER MORRISSEY OLIVER.MORRISSEY@NOTTINGHAM.AC.UK
Professor of Development Economics



Abstract

Increasing tax revenues in low income countries is essential to address future development finance requirements. This is particularly important for aid recipients, the focus of this paper. Theory shows that although there are many ways in which aid can have indirect effects on tax revenue, the direct effects arise because aid and tax are alternative sources of revenue and political economy factors influence the choices made by government. Aid may discourage tax effort if viewed as a politically less costly source of revenue. Under different conditions, the policies and reforms associated with aid may increase revenue, through promoting growth, encouraging more efficient tax structures or supporting reforms to tax administration. While cross-country evidence reveals no systematic pattern, country studies show that aid can be associated with administrative and efficiency reforms to increase tax revenue. The conclusion discusses how aid and donors can promote increasing domestic tax revenue.

Citation

Morrissey, O. (2015). Aid and domestic resource mobilisation with a focus on sub-Saharan Africa. Oxford Review of Economic Policy, 31(3-4), https://doi.org/10.1093/oxrep/grv029

Journal Article Type Article
Acceptance Date Dec 12, 2014
Publication Date Mar 1, 2015
Deposit Date Oct 11, 2017
Publicly Available Date Mar 28, 2024
Journal Oxford Review of Economic Policy
Print ISSN 0266-903X
Electronic ISSN 0266-903X
Publisher Oxford University Press
Peer Reviewed Peer Reviewed
Volume 31
Issue 3-4
DOI https://doi.org/10.1093/oxrep/grv029
Keywords Aid, Taxation, Fiscal Response, Tax Reform
Public URL https://nottingham-repository.worktribe.com/output/744076
Publisher URL https://academic.oup.com/oxrep/article-lookup/doi/10.1093/oxrep/grv029

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