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Societal Institutions and Tax Effort in Developing Countries

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  • Richard M. Bird

    (Business Economics, Rotman School of Management, University of Toronto
    International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University
    Australian Taxation Studies Program (ATAX), Faculty of Law, University of New South Wales)

  • Jorge Martinez-Vazquez

    (Department of Economics, Andrew Young School of Policy Studies, Georgia State University
    International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University
    Andrew Young School of Policy Studies, Georgia State University
    REDE, Faculty of Economics and Management, University of Vigo)

  • Benno Torgler

    (School of Economics and Finance, Business School, Queensland University of Technology)

Abstract

The main theme of this paper is that a more legitimate and responsive state appears to be an essential precondition for a more adequate level of tax effort in developing countries. The most important contribution of this paper is to extend the conventional model of tax effort by showing that not only do supply factors matter, but that societal institutions (demand factors) also determine tax effort to a significant extent.

Suggested Citation

  • Richard M. Bird & Jorge Martinez-Vazquez & Benno Torgler, 2014. "Societal Institutions and Tax Effort in Developing Countries," Annals of Economics and Finance, Society for AEF, vol. 15(1), pages 301-351, May.
    • Handle: RePEc:cuf:journl:y:2014:v:15:i:1:bird
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    More about this item

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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