Does democracy affect taxation and government spending? Evidence from developing countries

Profeta, Paola; Puglisi, Riccardo; Scabrosetti, Simona

doi:10.1016/j.jce.2012.10.004

Cited by 73 publications

(75 citation statements)

References 50 publications

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“…Our empirical findings appear to be in accordance (although not directly related) with the conclusions driven by the empirical studies of Mulligan et al (2004) and Profeta et al (2012) which also fail to establish a robust relationship between the degree of democracy and the composition of taxation. Specifically, Mulligan et al (2004) shows that democracy does neither affect total tax revenue (as a share of GDP) nor corporate tax rates.…”

supporting

confidence: 86%

“…3 A small but growing number of empirical studies examine the effect of democracy on the size of total tax revenues and the composition of taxation (see e.g. Aidt and Jensen, 2009;Boix, 2001;2003;Kenny and Winner, 2006;Mulligan et al, 2004;Profeta et al 2012). The theoretical argument behind the potential impact of democracy on tax policies goes as follows.…”

Section: Introductionmentioning

confidence: 99%

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Income inequality and the tax structure: Evidence from developed and developing countries

Adam

Kammas

Λαπατίνας

2015

Journal of Comparative Economics

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This paper seeks to examine the effect of income inequality on the structure of tax policies. We first use a simplified theoretical framework which allows us to formalize the testable implications of the relevant literature. Subsequently, our analysis indicates that more unequal economies rely heavier on capital relative to labor income taxation. This relationship remains robust across various alternative measures of income inequality and most importantly through alternative political regimes. In addition, our analysis places the spotlight on the potential reverse causality between income inequality and structure of the tax policies and seeks to address it by making use of the most appropriate data and techniques. JEL: H10, H23, H26

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supporting

confidence: 86%

Section: Introductionmentioning

confidence: 99%

Income inequality and the tax structure: Evidence from developed and developing countries

Adam

Kammas

Λαπατίνας

2015

Journal of Comparative Economics

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“…It also expands our knowledge regarding the determinants of reforms from some previous crosscountry based research (such as Mahon, 2004;Profeta and Scabrosetti, 2008;and Castanheira, Nicodème and Profeta, 2012). Finally, it adds to our knowledge about the mechanisms behind the workings of democratic institutions on tax levels and composition, which complements the results in Profeta, Puglisi and Scabrosetti (2013) on the determinants of spending and taxation after transition.…”

Section: Introductionsupporting

confidence: 54%

“…This result moves the discussion a step forward because, while it is are consistent with previous work on stabilization that finds a role for crises and political variables for explaining fiscal consolidation, such as Alesina, Ardagna and Trebbi (2006), it provides the channels through which this stabilization occurs, and how the burden is distributed across the population. The paper also helps to identify and disentangle some of the mechanisms behind the workings of democratic institutions and tax levels and composition, thereby complementing the results in Profeta, Puglisi and Scabrosetti (2013) on the determinants of spending and taxation after transition. These results are in line with evidence coming from more detailed country studies from Latin America (Bonvecchi et al, 2014;Magar, Romero and Timmons, 2009;Melo, Pereira and Sousa, 2010;and Olivera, Pachón and Perry, 2010).…”

Section: Discussionmentioning

confidence: 90%

“…Profeta, Puglisi and Scabrosetti (2013) consider the effect of democracy on the determinants of spending and taxation after transition for several regions of the world. Because they do not find significant and consistent results for the democratic proxies, they call for renewed efforts to trace the exact public policy channels through which political institutions affect economic development, an endeavor we attempt in this paper.…”

Section: Previous Literature On Tax Reform In Latin Americamentioning

confidence: 99%

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Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Hallerberg

Scartascini

2015

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Terms of use: Documents inFollowing a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2015 1 Abstract * This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained dataset of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform is higher during banking crises. During electoral periods, increasing taxes becomes highly unlikely, even if the government is facing financing problems. Interestingly, politics seem to trump economics: banking crises do not affect the probability of having a reform during electoral times. Moreover, the presence of an IMF program affects the tax instruments chosen: countries with a program increase the value-added tax, while those without raise the personal income tax. Finally, the ideology of the president does not explain who bears the additional tax burden. JEL classifications: F41, H2

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Do Democracies Tax More? Political Regime Type and Taxation

Garcia

Haldenwang

2015

J of Intl Development

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A growing body of literature suggests that political regime type matters in determining taxation. However, research on the relationship of political regimes to taxation yields mixed results. To what extent does the democratic or authoritarian character of the polity impact on the level of taxation? The paper investigates the relationship between political regimes and tax-to-gross domestic product ratio, using a panel dataset of 131 countries and covering the period 1990-2008. Findings suggest that the character of the polity affects taxation, but there is no linear trend in favour of democracy. Rather, the results indicate a U-shaped relationship between polity and tax ratio.

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Does democracy affect taxation and government spending? Evidence from developing countries

Cited by 73 publications

References 50 publications

Income inequality and the tax structure: Evidence from developed and developing countries

Income inequality and the tax structure: Evidence from developed and developing countries

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Do Democracies Tax More? Political Regime Type and Taxation

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