Revisiting the Relationship between Trade Liberalization and Taxation

Arbeitspapier

This paper explores the dynamic effects of trade liberalization on tax revenue using a worldwide panel dataset. Results point to statistically significant negative effect of liberalization on (non- resource) tax revenues in the short term and no significant effect in the medium term. Liberalization also alter the tax structure tilting revenues toward indirect taxes away from direct ones. Economies which have implemented value added taxes prior to liberalization have mitigated its negative effects on tax revenues. The evidence is supportive of the complementarity role of state capacity to reap the benefits of liberalization.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 9244

Classification and Topics

• Classification: Wirtschaft ; Taxation, Subsidies, and Revenue: General ; International Fiscal Issues; International Public Goods ; Trade Policy; International Trade Organizations
• Subject: tax ; tax structure ; openness ; liberalization ; natural resources

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Arezki, Rabah ; Dama, Alou Adesse ; Rota-Graziosi, Gregoire
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2021

Further information

• Handle: http://hdl.handle.net/10419/245425
• Last update: 10.03.2025, 11:44 AM CET