A Time to Build: Does TA Matter for Revenue Mobilization?

By Ralph Chami, Elorm Darkey, Oral Williams

February 12, 2021

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Ralph Chami, Elorm Darkey, and Oral Williams. A Time to Build: Does TA Matter for Revenue Mobilization?, (USA: International Monetary Fund, 2021) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

We use a unique data set for 115 countries, from 2000–18, and 5-year non-overlapping averages to explore the impact of technical assitance on revenue mobilization. To the authors’ knowledge this is the first such effort to determine a direct relationship between technical assistance and the improvement in tax revenues. The paper finds that technical assistance significantly and positively increases tax revenues. Both income per capita and openness were found to positively improve the tax ratio in line with findings in the literature. Dynamic estimations also uncovered a long-run relationship among technical assistance, income per capita, openness, and tax revenues. This result further underscores that it takes time to build capacity and institutional resilience.

Subject: Corruption, Estimation techniques, Income, Revenue administration, Tax administration core functions

Keywords: Error correction coefficient, Financing for development, Fiscal policy, Institutions, Long-run coefficient, Order of magnitude, Revenue mobilization, Sustainable development goals., Tax ratio, Tax revenue variable, WP

Publication Details

Pages:

16
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2021/035
Stock No:

WPIEA2021035
ISBN:

9781513569468
ISSN:

1018-5941

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