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How Does Inclusive Growth Boost Tax Revenue Mobilization?
Auteur(s) : COMBES [J-L] , OUEDRAOGO [R]
Abstract / Résumé : Despite high economic growth in the last decades, many developing countries remain into poverty, income inequality and unemployment of young people, which have led some countries to adopt inclusive growth strategies. In this paper, we show how inclusive growth can boost tax revenue mobilization in developing countries. Effective public policies, improving social cohesion are fundamental to meet citizens’ aspirations and therefore incite them to comply with taxes. To this end, this study uses GMM techniques to deal with endogeneity issue and spans 55 developing countries over the period of 1995-2010. We find that inclusive growth has positive effect on tax revenue mobilization. This finding is robust to various aspects of inclusive growth measurements and additional controls.
Keywords / Mots Clés : Inclusive growth; Taxes revenue; Inequality; Employment
Code JEL : F43 - Economic Growth of Open Economies , D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement , O11 - Macroeconomic Analyses of Economic Development , H20 - General