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Taxation, foreign aid and political governance: figures to the facts of a celebrated literature

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  • Asongu, Simplice
Abstract
This paper puts figures to the facts of Eubank (2012), a recently celebrated paper in the Journal of Development Studies. We investigate the underpinning Somaliland-based hypothesis that foreign aid dilutes the positive role of taxation on political governance. The assessment is based on 53 African countries for the period 1996-2010. For more policy options, the dataset is disaggregated into fundamental characteristics of African development based on income-levels, legal origins, natural resources and landlockeness. While the Eubank hypothesis is invalid in baseline Africa, low-income and English common law countries of the continent, we cannot conclude on its validity for other fundamental characteristics of development. Policy implications, caveats and future directions are discussed.

Suggested Citation

  • Asongu, Simplice, 2014. "Taxation, foreign aid and political governance: figures to the facts of a celebrated literature," MPRA Paper 63792, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63792
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    More about this item

    Keywords

    Foreign Aid; Political Economy; Development; Africa;
    All these keywords.

    JEL classification:

    • B20 - Schools of Economic Thought and Methodology - - History of Economic Thought since 1925 - - - General
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F50 - International Economics - - International Relations, National Security, and International Political Economy - - - General
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O55 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Africa

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