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Taxation, foreign aid and political governance: figures to the facts of a celebrated literature

Project    Medals for Research on Development 2013-14
Author   Simplice A. Asongu
Date   2014
Description   This paper puts figures to the facts of Eubank (2012), a recently celebrated paper in the Journal of Development Studies. We investigate the underpinning Somaliland-based hypothesis that foreign aid dilutes the positive role of taxation on political governance. The assessment is based on 53 African countries for the period 1996-2010. For more policy options, the dataset is disaggregated into fundamental characteristics of African development based on income-levels, legal origins, natural resources and landlockeness. While the Eubank hypothesis is invalid in Africa and low-income countries of the continent, we cannot conclude on its validity for other fundamental characteristics of development. Policy implications, caveats and future directions are discussed
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