Foreign Aid and Revenue: Still a Crowding-Out Effect?

Benedek, Dóra; Crivelli, Ernesto; Muthoora, Priscilla; Gupta, Sanjeev

doi:10.1628/001522114x679156

Cited by 68 publications

(93 citation statements)

References 7 publications

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“…For ease of reference, Benedek et al. () results are reproduced in columns (5) and (6). These new results concur that tax revenue has a negative association with agriculture and a positive association with income per capita.…”

Section: Inability To Replicate Resultsmentioning

confidence: 99%

“…Columns (5) and (6) are taken from Benedek et al. () table , columns (1) and (4), where the estimator is also OLS with country fixed effects.…”

Section: Inability To Replicate Resultsmentioning

confidence: 99%

“…Benedek et al. () report that aid has a negative effect with increasing returns to scale. This pattern is only found when using GFS 2001 data, indeed the two largest datasets find opposite coefficient signs.…”

Section: Multiple Sourcesmentioning

confidence: 99%

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Foreign aid and domestic taxation: multiple sources, one conclusion

Clist¹

2016

Development Policy Review

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There are influential studies that argue that foreign aid displaces domestic tax revenue when it is given in the form of grants. These claims are based on data that are deeply problematic: several different sources are amalgamated into one dataset, with no apparent checks on compatibility. In this article, a variety of econometric strategies are used to overcome these issues of data quality. The resulting weight of evidence points to a modest but positive effect on the part of foreign aid generally on domestic tax revenue. Fears over a negative effect for aid grants appear unwarranted, and are accounted for by the inappropriate use of data or endogeneity issues.

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Section: Inability To Replicate Resultsmentioning

confidence: 99%

“…Columns (5) and (6) are taken from Benedek et al. () table , columns (1) and (4), where the estimator is also OLS with country fixed effects.…”

Section: Inability To Replicate Resultsmentioning

confidence: 99%

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Foreign aid and domestic taxation: multiple sources, one conclusion

Clist¹

2016

Development Policy Review

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“…El hecho de contraer deuda exterior (y también deuda nacional) genera obligaciones de servicio de la deuda que reducen el espacio fiscal futuro y puede resultar desaconsejable desde la perspectiva de la sostenibilidad de la deuda. Las subvenciones no plantean este problema, pero su disponibilidad y duración suelen ser mucho más limitadas; existen asimismo pruebas que demuestran que las subvenciones tienen una repercusión negativa, aunque cada vez menor, en los ingresos fiscales (Benedek y otros, ).…”

Section: Margen Para Aumentar El Espacio Fiscalunclassified

Financiación de los pisos de protección social: consideraciones acerca del espacio fiscal

Harris

2013

Revista Int Seguridad Social

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Resumen La eficacia de la protección social para luchar contra la pobreza y la vulnerabilidad, amortiguar la repercusión de las crisis, atenuar la desigualdad y apoyar el crecimiento a largo plazo es un hecho establecido. Sin embargo, los sistemas de protección social eficaces son desde hace tiempo un lujo inasequible para muchos países en desarrollo y de bajos ingresos. El concepto de piso de protección social pretende garantizar un nivel mínimo de protección social a un costo razonable, incluso cuando los recursos son limitados, y sirve de plataforma para la aplicación progresiva de un sistema completo de protección social. Para introducir, mantener y extender el piso de protección social es necesario la movilización del espacio fiscal, tanto a corto como a largo plazo. En el artículo se afirma que para generar espacio fiscal hay que considerar detenidamente cuestiones como la previsibilidad y la repercusión de las opciones de financiación actuales en la sostenibilidad fiscal y de la deuda, la estabilidad macroeconómica, la desigualdad, la reducción de la pobreza y el crecimiento y, por lo tanto, en el futuro espacio fiscal. Desde esta perspectiva se abordan algunas de las consecuencias que supone generar espacio fiscal mediante la movilización de recursos internos adicionales, la reasignación del gasto o mejoras de eficiencia, la reducción del servicio de la deuda o la financiación exterior. En el artículo se presentan también algunos datos relativos a las numerosas iniciativas que se han financiado a un costo razonable y sobre una base sostenible en países con diferentes niveles de ingresos y de desarrollo, tanto con recursos propios como exteriores.

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“…Greater fiscal reliance on domestic taxpayers, in contrast, would consolidate a fiscal (social) contract between the state and the population, with supposed positive effects on state durability, legitimacy, and effectiveness (Moore 2004). By contrast, both aid and rents are seen to have a crowding-out effect on domestic taxation, especially among low-income countries with weak institutions (Benedek et al 2012), precisely those supposedly most in need of foreign assistance or most vulnerable to the "resource curse." Aid and rents also may vary greatly in their institutional and developmental effects, largely as a result of distinctive allocation processes: at least in the case of aid, "donor-imposed mechanisms of scrutiny" may substitute for the reduced pressure from citizens (Collier 2006(Collier , 1485.…”

mentioning

confidence: 99%

Foreign Aid, Resource Rents, and State Fragility in Mozambique and Angola

Niño¹,

Billon²

2014

The ANNALS of the American Academy of Political and Social Scie

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Sharing similar colonial and postindependence civil war experiences, Mozambique’s and Angola’s development paths are often contrasted, with foreign aid–dependent Mozambique hailed a success compared to oil-rentier Angola. This article questions the so-called Mozambican miracle and revisits Angola’s trajectory over the past two decades. Paying attention to ruling parties and postwar political economy transitions, we discuss differences and similarities in postconflict reconstruction paths, policy, and institutional fragility. We suggest that large aid flows to Mozambique have contributed to a relaxation of its government’s urgency in creating the financial structure capable of capturing rents from natural resources in contrast to Angola, where the relative absence of official development aid has led Angolan elites to seek tenure prolongation partly through high rent capture and incipient socialization of massive oil rents. We conclude by discussing the likely consequences of these factors in terms of the relative “fragility” and “robustness” of both states, and by discussing the implications for foreign assistance.

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Foreign Aid and Revenue: Still a Crowding-Out Effect?

Cited by 68 publications

References 7 publications

Foreign aid and domestic taxation: multiple sources, one conclusion

Foreign aid and domestic taxation: multiple sources, one conclusion

Financiación de los pisos de protección social: consideraciones acerca del espacio fiscal

Foreign Aid, Resource Rents, and State Fragility in Mozambique and Angola

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