Does conditionality in IMF-supported programs promote revenue reform?

November 19, 2014

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Format: Chicago

Ernesto Crivelli, and Sanjeev Gupta. Does conditionality in IMF-supported programs promote revenue reform?, (USA: International Monetary Fund, 2014) accessed December 26, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper studies whether revenue conditionality in Fund-supported programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993-2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.

Subject: Consumption taxes, National accounts, Personal income, Revenue administration, Tax administration core functions, Taxes, Value-added tax

Keywords: Conditionality dummy, Consumption taxes, Global, IMF conditionality, IMF-supported program, Personal income, Revenue collection, Revenue conditionality, Structural conditionality, Sub-Saharan Africa, Tax administration core functions, Tax revenue, Tax revenue performance, Value-added tax, WP

Publication Details

Pages:

32
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2014/206
Stock No:

WPIEA2014206
ISBN:

9781484380048
ISSN:

1018-5941

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