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Investigating the fiscal resource curse: What's China got to do with it?

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  • Daniel Chachu
  • Edward Nketiah-Amponsah

Abstract

The term fiscal resource curse refers to countries' inability to raise taxes from a broad base in the presence of natural resources. We employ a novel instrumental variable strategy to estimate the causal effect of resource revenues on non-resource tax effort by exploiting the so-called 'China shock'. Since its 2001 accession to the World Trade Organization, China's non-renewable resource trade has driven up commodity prices, raising resource revenues among exporting countries.

Suggested Citation

  • Daniel Chachu & Edward Nketiah-Amponsah, 2020. "Investigating the fiscal resource curse: What's China got to do with it?," WIDER Working Paper Series wp-2020-85, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2020-85
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    References listed on IDEAS

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    Keywords

    China; Infrastructure; Natural resources; Tax; Tax effort; Trade;
    All these keywords.

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