This paper uses panel data and a dynamic common correlated effect estimator to investigate the effects of non-food agricultural aid on agricultural output in African countries during the 1970 to 2018 period. Using five measures of agricultural outputs in per capita terms and controlling for a number of covariates, we find that non-food agricultural aid, at the aggregate level, has positive and statistically significant short- and long-term effects on agricultural output in African countries. Using disaggregated aid data, we also find that several components of non-food agricultural aid have significant positive effects on agricultural output in Africa, while some components of non-food agricultural aid have no significant effect on agricultural output, suggesting that the composition of the aid matters for aid effectiveness. The results are robust to several specifications and different estimation methodologies including estimators that account for cross-sectional dependence. The results of this paper have implications on aid policy and research.
We examine both vertical and horizontal tax competition over time by studying the strategic response of county sales taxation to state sales taxes and to cross-border neighboring municipalities' combined (state and county) taxes. Using county and state sales tax data from 2003 through 2009, we employ both static and dynamic panel analysis as well as an instrumental variables approach in combination with a border analysis. Our results confirm the presence of tax competition in the cross section, as previous studies have found. Results from the fixedeffects and dynamic panel analysis also indicate the presence of vertical competition, though quite small, as counties are consistently responsive to changes in their own state sales tax level across all models and specifications. However, the panel findings suggest little to no horizontal tax competition. Following Parchet (2019), we address additional concerns about endogeneity by instrumenting the neighboring-county sales tax rate with the state-level sales tax rate of the neighboring state. Results from instrumental variables analysis reinforce the presence of a small vertical tax competition between local and state sales tax policies. Interestingly, our results, like those of Parchet (2019), indicate that cross-border local sales tax rates act as strategic substitutes.
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