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Domestic revenue displacement in resource-rich countries: What’s oil money got to do with it?


Chachu, Daniel Ofoe (2020). Domestic revenue displacement in resource-rich countries: What’s oil money got to do with it? Resources Policy, 66:101656.

Abstract

Cross-country studies on the effect of hydrocarbon revenues and non-hydrocarbon tax effort are only now emerging. Using an expanded global dataset in a two-stage least squares framework, we confirm a displacement effect. A percentage point increase in hydrocarbon revenues displaces non-hydrocarbon revenues by 0.2 to 0.3 percentage points. With low levels of domestic revenue and a debt crises looming for many developing countries, resource-rich countries need to leverage on their resource wealth to invigorate the non-resource sectors of their economies. This should widen the tax base and optimize the tax take for oil-rich countries over the long haul.

Abstract

Cross-country studies on the effect of hydrocarbon revenues and non-hydrocarbon tax effort are only now emerging. Using an expanded global dataset in a two-stage least squares framework, we confirm a displacement effect. A percentage point increase in hydrocarbon revenues displaces non-hydrocarbon revenues by 0.2 to 0.3 percentage points. With low levels of domestic revenue and a debt crises looming for many developing countries, resource-rich countries need to leverage on their resource wealth to invigorate the non-resource sectors of their economies. This should widen the tax base and optimize the tax take for oil-rich countries over the long haul.

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Additional indexing

Item Type:Journal Article, refereed, original work
Communities & Collections:06 Faculty of Arts > Institute of Political Science
Dewey Decimal Classification:150 Psychology
Scopus Subject Areas:Social Sciences & Humanities > Sociology and Political Science
Social Sciences & Humanities > Economics and Econometrics
Physical Sciences > Management, Monitoring, Policy and Law
Social Sciences & Humanities > Law
Uncontrolled Keywords:Law, Management, Monitoring, Policy and Law, Economics and Econometrics, Sociology and Political Science
Language:English
Date:1 June 2020
Deposited On:08 Feb 2022 15:47
Last Modified:26 Jun 2024 01:51
Publisher:Elsevier
ISSN:0301-4207
OA Status:Closed
Publisher DOI:https://doi.org/10.1016/j.resourpol.2020.101656