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Does reduced trade tax revenue affect government spending patterns?

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  • MichaelO. Moore
  • Maurizio Zanardi

Abstract

Many skeptics of trade liberalization in the developing world argue that lowering trade taxes can cause significant fiscal pressures in countries particularly reliant on these taxes and result in a reallocation of resources away from important development goals. This paper evaluates whether there is evidence that central governments systematically change the composition of spending priorities in the wake of lowered trade tax revenues as a share of total government revenues. We find no systematic evidence for this concern in a sample of 51 developing countries for the 1991 through 2005 period. © 2011 Springer Science+Business Media, LLC.

Suggested Citation

  • MichaelO. Moore & Maurizio Zanardi, 2011. "Does reduced trade tax revenue affect government spending patterns?," ULB Institutional Repository 2013/136353, ULB -- Universite Libre de Bruxelles.
    • Handle: RePEc:ulb:ulbeco:2013/136353
    Note: SCOPUS: ar.j
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    Cited by:

    1. António Afonso & João Tovar Jalles & Ana Venâncio, 2021. "Structural Tax Reforms and Public Spending Efficiency," Open Economies Review, Springer, vol. 32(5), pages 1017-1061, November.
    2. Khalil Ahmad & Amjad Ali & Michael Yang, 2022. "The Effect Of Trade Liberalization On Expenditure Structure Of Pakistan," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 11(1), pages 73-84, March.
    3. Lanre Kassim, 2016. "The Revenue Implication of Trade Liberalisation in Sub-Saharan Africa: Some new evidence," Studies in Economics 1605, School of Economics, University of Kent.

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    More about this item

    Keywords

    Government expenditure; Tariff revenue; Trade liberalization; H7; F13;
    All these keywords.

    JEL classification:

    • H7 - Public Economics - - State and Local Government; Intergovernmental Relations
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations

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