Trade liberalization and tax revenue relationship in Sub-Saharan Africa : by Terence Agbeyegbe, Janet Skotsky and Wolde Mariam
Author(s)/Corporate Author (s)United Nations. Economic Commission for Africa;
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The empirical evidence on the relationship between trade liberalization and tax revenue is mixed. This paper attempts to ascertain whether the mixed result can be attributed to the use of different indices of trade liberalization, model specification and/or estimation methods. Using a panel of 22 countries in Sub-Saharan Africa over 1980-1996, we consider two indices of trade liberalization and perform both difference and system GMM regressions. We find evidence that the relationship between trade liberalization and tax revenue is indeed not robust to these considerations.