CoChat
Sign Up
Cited by 36Economic and Fiscal StudiesTaxation and Compliance StudiesFiscal Policies and Political Economy

Financial Development and Tax Revenue: How Catalytic Are Political Development and Corruption?

Open access
Nnyanzi, John Bosco, Bbale, John Mayanja, Sendi, Richard·2018·International Journal of Economics and Finance
DOI 10.5539/ijef.v10n8p92
Open this paper in CoChat — free accountOpen PDF

Abstract

Increasing domestic revenue mobilization remains a challenge for many governments, particularly in low-income countries. Using a sample of East African countries, the study sets off to investigate the impact of financial development from a multi-dimensional perspective on tax revenues for the period 1990 to 2014, and how political development and the control of corruption would enhance the observed nexus. The dynamic panel results from the system GMM estimation approach indicate a significant role of financial development overall and the financial institutions and financial markets in particular. A disaggregation of the duo suggests that it is the depth of financial institutions that greatly matters for tax revenue, with a one per cent change expected to yield about 0.26 per cent change in tax collections. It is then followed by their level of accessibility, financial market depth and efficiency. We fail to find significant evidence in support of financial market access and financial institutions efficiency although the possibility for the latter seems indismissible. Further evidence points to the catalytic nature of a good institutional and political environment in pursuit of higher tax-GDP ratio via financial development. Policies to promote the depth and accessibility of financial institutions as well the depth and efficiency of financial markets in East Africa alongside well-focused anti-corruption programs and democratic governance are likely to yield better fiscal outcomes in terms of domestic tax revenues critically needed to achieve the United Nations Sustainable Development Goals. We also confirm the positive role played by the lagged tax revenue, per capita GDP, trade openness, debt-to-GDP ratio and population density in the tax effort.

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Integrity signals

Registry

Crossref · 10.5539/ijef.v10n8p92

Cites

25 of 25 references verified0 citation errors · 0 not checkable

Statistics

Claims the paper makes

The claims and statistics of this paper haven’t been checked yet.

Run the check — free, no account needed. It reads the open-access text and checks the sources it cites.

A few free checks a day · papers already verified open instantly · results are public

Claims other papers make about this one

Each is checked against this paper’s own text: does it say what the citing paper says it does?

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

The self-check needs the paper’s full text.

Cites

Flagged first, then by citations

1 of the 26 references couldn’t be matched to a known paper.

Research works printed but not linked: 1

  1. UN (United Nations). (2015). Addis Ababa Action Agenda of the Third International Conference on Financing for Development (15 July 2015, A/CONF.227/L.1). New York: Author. Retrieved from http://www.un.org/en/ga/search/view_doc.asp?symbol=A/CONF.227/L.1

Cited by

Sorted by citations

Related

Authors
Nnyanzi, J. B., Bbale, J. M., & Sendi, R.
Affiliations
  • Makerere University (UG)
  • Government of Uganda (UG)
ORCID
Venue
International Journal of Economics and Finance
Publisher
Canadian Center of Science and Education
Published
2018-07-04
Volume
10
Issue
8
Pages
92
ISSN
  • 1916-971X (ISSN-L)
  • 1916-9728
DOI
10.5539/ijef.v10n8p92
OpenAlex
W2841490677
Cited by
36
References
26
Citations by year
2026: 2 · 2025: 4 · 2024: 10 · 2023: 7 · 2022: 4 · 2021: 5 · 2020: 3 · 2019: 1
FWCI
3.42
Type
journal article
Language
en
Open access
Licence
Locations
  • International Journal of Economics and Finance (publishedVersion, cc-by)
  • RePEc: Research Papers in Economics (submittedVersion)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic and Fiscal Studies
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Taxation and Compliance Studies
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Fiscal Policies and Political Economy
Keywords
financial development, tax revenue, domestic revenue mobilization, political development, corruption, financial institutions, financial market depth, financial market efficiency, tax effort, anti-corruption policy, democratic governance, East Africa, Sustainable Development Goals

About these checks

Registry, retraction, Cites and statistics results are computed, not judged, with one exception: a printed reference that no index lists is read once by a model before it counts as a citation error. Claims are extracted by a model and kept only when their quote appears verbatim in the text; each cited source is then checked, with a model’s help, for whether it says what the claim relies on. Those verdicts can be wrong — read the claim’s quote and the cited source before relying on one.

Statistics and arithmetic are recomputed, not judged.

Confidence bands are shown only for fields calibrated on our annotated test set. None is calibrated yet, so no band is shown.

What counts as a claim ›How we measure confidence ›How we check this ›

Are you an author, or do you see a problem with this page? Request a review