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Tax-aid nexus - The case of Sub-Saharan Africa and China

Coppieters, Marthe LU (2023) EKHS42 20231
Department of Economic History
Abstract
This paper empirically discusses the interaction between Chinese Official Development Assistance (ODA) and Sub-Saharan tax revenue 2000-2017. Through the use of the methods OLS and IV, I pose the question whether there is evidence supporting the tax-aid nexus, which suggests a negative impact of increasing foreign aid on tax revenue. Additionally, the research delves into the specific effects of ODA loans compared to ODA grants, as well as the varying impact of sector-specific ODA flows on tax revenue. The findings reveal that an increase in Chinese ODA has a detrimental impact on tax revenue in Sub-Saharan Africa. Moreover, the results suggest that an increase in grants offsets tax revenue, while an increase in loans does not yield a... (More)
This paper empirically discusses the interaction between Chinese Official Development Assistance (ODA) and Sub-Saharan tax revenue 2000-2017. Through the use of the methods OLS and IV, I pose the question whether there is evidence supporting the tax-aid nexus, which suggests a negative impact of increasing foreign aid on tax revenue. Additionally, the research delves into the specific effects of ODA loans compared to ODA grants, as well as the varying impact of sector-specific ODA flows on tax revenue. The findings reveal that an increase in Chinese ODA has a detrimental impact on tax revenue in Sub-Saharan Africa. Moreover, the results suggest that an increase in grants offsets tax revenue, while an increase in loans does not yield a significant effect. Lastly, although no discernible effect can be observed in the economic sector, there is evidence indicating that increased Chinese ODA inflows in the social sector negatively affect tax effort. (Less)
Please use this url to cite or link to this publication:
author
Coppieters, Marthe LU
supervisor
organization
course
EKHS42 20231
year
type
H2 - Master's Degree (Two Years)
subject
language
English
id
9125816
date added to LUP
2023-06-22 12:29:51
date last changed
2023-06-22 12:29:51
@misc{9125816,
  abstract     = {{This paper empirically discusses the interaction between Chinese Official Development Assistance (ODA) and Sub-Saharan tax revenue 2000-2017. Through the use of the methods OLS and IV, I pose the question whether there is evidence supporting the tax-aid nexus, which suggests a negative impact of increasing foreign aid on tax revenue. Additionally, the research delves into the specific effects of ODA loans compared to ODA grants, as well as the varying impact of sector-specific ODA flows on tax revenue. The findings reveal that an increase in Chinese ODA has a detrimental impact on tax revenue in Sub-Saharan Africa. Moreover, the results suggest that an increase in grants offsets tax revenue, while an increase in loans does not yield a significant effect. Lastly, although no discernible effect can be observed in the economic sector, there is evidence indicating that increased Chinese ODA inflows in the social sector negatively affect tax effort.}},
  author       = {{Coppieters, Marthe}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Tax-aid nexus - The case of Sub-Saharan Africa and China}},
  year         = {{2023}},
}