Does conditionality in IMF-supported programs promote revenue reform?

Author/Editor:

Ernesto Crivelli ; Sanjeev Gupta

Publication Date:

November 19, 2014

Electronic Access:

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Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

This paper studies whether revenue conditionality in Fund-supported programs had any impact on the revenue performance of 126 low- and middle-income countries during 1993-2013. The results indicate that such conditionality had a positive impact on tax revenue, with strongest improvement felt on taxes on goods and services, including the VAT. Revenue conditionality matters more for low-income countries, particularly those where revenue ratios are below the group average. Moreover, revenue conditionality appears to be more effective when targeted to a specific tax. These results hold after controlling for potential endogeneity, sample selection bias, and when revenues are adjusted for economic cycle.

Series:

Working Paper No. 2014/206

Subject:

Consumption taxes National accounts Personal income Revenue administration Tax administration core functions Taxes Value-added tax

English

Publication Date:

November 19, 2014

ISBN/ISSN:

9781484380048/1018-5941

Stock No:

WPIEA2014206

Pages:

32

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