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Analysis of Revenue Potential and Revenue Effort in Developing Asian Countries

Author

Listed:
  • Attiya Y. Javid

    (Pakistan Institute of Development Economics, Islamabad.)

  • Umaima Arif

    (Economics Department, Quaid-i-Azam University, Islamabad.)

Abstract

This study analyses fiscal performance across developing Asian countries over the period 1984 to 2010. The results indicate that per capita GDP, agriculture value addition, trade openness, debt and population growth are significant determinants of revenue to GDP ratio across countries. Among the institutional factors, control of corruption, law and order and bureaucracy quality has a significantly positive effect on revenue performance. The fiscal effort indices obtained for Asian countries show that while several ASEAN countries are performing well above their potential, some South Asian economies fall short of their revenue potential. An overall decline in revenue effort is found in nineties, however in eighties and again in twenties there is improvement in revenue performance. The results suggest that there is need of good policy measures such as broadening the tax base and improving the institutional quality to address this issue. The architect of revenue reforms must be country specific that requires broad investigation of the country’s revenue capacity, revenue performance, and institutional structure.

Suggested Citation

  • Attiya Y. Javid & Umaima Arif, 2012. "Analysis of Revenue Potential and Revenue Effort in Developing Asian Countries," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 51(4), pages 365-380.
    • Handle: RePEc:pid:journl:v:51:y:2012:i:4:p:365-380
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    File URL: http://www.pide.org.pk/pdf/PDR/2012/Volume4/365-380.pdf
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    References listed on IDEAS

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    1. António Afonso & Ana Patricia Montes & José M. Domínguez, 2024. "Measuring Tax Burden Efficiency in OECD Countries: An International Comparison," CESifo Working Paper Series 11333, CESifo.

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    More about this item

    Keywords

    Revenue Potential; Fiscal Effort; Institution Quality; Asian Countries; Panel Data;
    All these keywords.

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development

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