Taxation, Corruption, and Growth

Aghion, Philippe; Akcigit, Ufuk; Cagé, Julia; Kerr, William A.

doi:10.3386/w21928

Cited by 18 publications

(8 citation statements)

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“…Corruption is associated negatively with tax collection and the ability of the state to generate revenue (IMF, 2019;Aghion et al, 2016). A number of factors contribute to tax avoidance creating risks of corruption: Complex tax laws, low probability of detection and low sanctions or limited capacity of tax administrations, and discretionary powers of tax officials.…”

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confidence: 99%

Building the evidence for OECD integrity and anti-corruption agenda: The current situation and avenues for future analysis

Šmídová¹

2020

OECD Economics Department Working Papers

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This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. 2  ECO/WKP(2020)22 Unclassified OECD Working Papers should not be reported as representing the official views of the OECD or of its member countries. The opinions expressed and arguments employed are those of the author(s). Working Papers describe preliminary results or research in progress by the author(s) and are published to stimulate discussion on a broad range of issues on which the OECD works.

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confidence: 99%

Building the evidence for OECD integrity and anti-corruption agenda: The current situation and avenues for future analysis

Šmídová¹

2020

OECD Economics Department Working Papers

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“…According Aghion et al (2016), the inverted U-shape relationship between taxation and growth will tend to improve the provision of public goods which makes small and large firms more productive and create disincentives to investment. The estimated graphs of the cumulative sum (CUSUM) and the cumulative sum of the squares (CUSUMQ) are presented in Fig.…”

Section: Resultsmentioning

confidence: 99%

The Dynamic Effects of Growth, Financial Development and Trade Openness on Tax Revenue in Malaysia

Loganathan¹,

Ahmad²,

Subramaniam³

et al. 2020

IJBS

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This study explores the effects of domestic financial development, growth and trade openness on tax collection for Malaysia using the ARDL and bootstrap rolling window estimates covering the period 1970-2017. The empirical results suggest that, the presence oflong-run relationship between tax revenue and per capita GDP and short-run relationship between tax collection, economic growth, financial development and trade openness. We foundthatthere is a short-run unidirectional causality running between tax collection, economic growth and financial development. This result suggests that, in the long-run, economic performance and financial development have an adverse effect on tax collection, while trade openness has no significant causality impact on tax collection in Malaysia. Based on the empirical results of the study, the country should pay more attention to enhance the effectiveness of future public expenditure programs and put more emphasisson dynamic fiscal policy targeting on tax reform and securing new sourcesof tax revenues to ensure continuous flow of long-term tax revenue coupled with sustainable economic growth, trade and financial performances in up-coming years.

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“…Furthermore, it reduces firms' competiveness in international markets, obstructing technology diffusion with foreign firms (Paunov, 2016). In addition, studies by both Aghion et al (2016) and Murphy (2010) demonstrated that a high level of corruption increases production and other business costs, thus acting as a deterrent to new long-term investment in developing economies. Corruption similarly curtails FDI and its associated benefits, such as technological progress and the competitiveness of domestic firms (Méon and Weill, 2010;O'Toole and Tarp, 2014).…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

“…In general, corruption causes a deadweight loss to both private firms and consumers, which results in low domestic investment and economic growth (Churchill et al, 2013). Similarly, it has been shown that high levels of corruption are associated with low investment levels, because it acts as a tax on domestic investment (Mauro, 1995;Holcombe and Boudreaux, 2015;Aghion et al, 2016) in fact, Ben et al (2016) indicated that corruption acts as an inefficient tax system for firms. Olken and Pande (2012) have found that more regulations and the greater discretion exercised by public officials impose a higher burden on firms, enable further corruption, and provide a bigger incentive for firms to move into the shadow economy.…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

“…In highly corrupt and aid-dependent countries, there may be little incentive to mobilize domestic revenues, particularly when using a taxation system that is considered efficient (Benedek et al, 2014;Aghion et al, 2016;Gaspar et al, 2016). However, corruption inhibits development to an even greater extent than taxation (Koczan and Plekhanov, 2013).…”

Section: Empirical Literature Reviewmentioning

confidence: 99%

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Causes, Dissemination Channels, and Consequences of Corruption in Zimbabwe: Searching for a Kryptonite Solution

Muzurura

2019

Humanities and Social Sciences Letters

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The term corruption is a multidimensional phenomenon that encompasses abuse of power, misappropriation of public resources, fraud, bribes, collusion, and other rentseeking activities undertaken for private gain, monetary and non-monetary. Applying a logit model to a survey of 100 individuals and 50 small-to-medium-sized private firms, this study investigates the causes, dissemination channels, and consequences of corruption in Zimbabwe for the period 1998 to 2018. Opportunity perceptions, political instability, weak public institutions, excessive market regulations, red tape, cultural tolerance, competition, poverty, risk capital, business uncertainties, high taxation rates, the existence of a shadow economy, and the level of education were found to be the main causes of corruption. The channels of its dissemination are primarily the monetary and fiscal policies that implement macro-controls. This study therefore recommends the adoption of policies that reduce excessive market regulations for private exchanges, ensure the rule of law, restore macroeconomic stability, enhance regulatory quality and efficiency, develop robust and transparent public institutions, and minimize the discretionary powers of bureaucrats and politicians. Furthermore, to improve accountability, Zimbabwe should implement policies that ensure the forfeiture and repatriation of the proceeds of corruption, early detection of corruption, and prosecution of perpetrators, without fear or favor. Finally, severe penalties should be imposed on all cases of corruption, regardless of how petty, as preventive and deterrent measures. Contribution/Originality:This study contributes to the existing literature on the causes and consequences of corruption in Zimbabwe. Unlike similar studies that rely on cross sectional surveys, this study pioneers the application of binary choice models, in the form of the logit regression model, to examine the causes and dissemination channels of corruption. INTRODUCTION AND BACKGROUNDCorruption defies easy definition and categorization owing to its multifarious nature and deep-rooted political and socioeconomic relationships that are directly responsible for its existence, consequences, and dissemination; such complexity leads to a lack of consensus in characterizing corruption. As with the difficulty of categorizing the African spotted hyena as part of the dog or cat family, it is usually not difficult to identify corruption when it appears. Corruption occurs where rent-seeking activities, such as bribery, theft, fraud, and other subtle practices, including nepotism, underinvoicing of exports, transfer pricing, tax evasion, barriers to market entry, and exercising improper discretion, are pursued. Corruption can be perceived as the willful abuse or misuse of public office or public property for personal gain. Corruption exists when formal rules and regulations are overtly, or

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Taxation, Corruption, and Growth

Cited by 18 publications

References 35 publications

Building the evidence for OECD integrity and anti-corruption agenda: The current situation and avenues for future analysis

Building the evidence for OECD integrity and anti-corruption agenda: The current situation and avenues for future analysis

The Dynamic Effects of Growth, Financial Development and Trade Openness on Tax Revenue in Malaysia

Causes, Dissemination Channels, and Consequences of Corruption in Zimbabwe: Searching for a Kryptonite Solution

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