The East African (EA) countries have run budget deficits for over a decade, implying that the amount of tax is low compared to what is required for the smooth-running of their economies. Although several studies have attempted to explore factors behind low tax revenues, these have overly concentrated on the supply side factors (sectoral contributions to GDP, GDP per capita, and inflation). Moreover, these studies have had conflicting results on the determinants of tax revenue. This study, therefore, seeksto investigate the effect of the quality of governance on the amount of tax revenue in the EA countries (1996 to 2016). The study employs the Panel Autoregressive Distributed Lag model as developed by Pesaran et al. (1999). Empirical evidence from the pooled mean group shows a positive long-run relationship among the variables, implying that an improvement in the quality of governance leads to a long-run increase in tax revenue. Therefore, long-run efforts to increase tax revenue in EA should focus on improvements in the quality of governance. However, the study finds a negative short-run relationship.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.
customersupport@researchsolutions.com
10624 S. Eastern Ave., Ste. A-614
Henderson, NV 89052, USA
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.
Copyright © 2025 scite LLC. All rights reserved.
Made with 💙 for researchers
Part of the Research Solutions Family.