Oil revenues vs domestic taxation: Deeper insights into the crowding-out effect

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

Standard

Oil revenues vs domestic taxation : Deeper insights into the crowding-out effect. / Keller, Michael.

I: Resources Policy, Bind 76, 102560, 06.2022.

Publikation: Bidrag til tidsskriftTidsskriftartikelfagfællebedømt

Harvard

Keller, M 2022, 'Oil revenues vs domestic taxation: Deeper insights into the crowding-out effect', Resources Policy, bind 76, 102560. https://doi.org/10.1016/j.resourpol.2022.102560

APA

Keller, M. (2022). Oil revenues vs domestic taxation: Deeper insights into the crowding-out effect. Resources Policy, 76, [102560]. https://doi.org/10.1016/j.resourpol.2022.102560

Vancouver

Keller M. Oil revenues vs domestic taxation: Deeper insights into the crowding-out effect. Resources Policy. 2022 jun.;76. 102560. https://doi.org/10.1016/j.resourpol.2022.102560

Author

Keller, Michael. / Oil revenues vs domestic taxation : Deeper insights into the crowding-out effect. I: Resources Policy. 2022 ; Bind 76.

Bibtex

@article{049a7ebfaae7439a9245d613ccb8c138,
title = "Oil revenues vs domestic taxation: Deeper insights into the crowding-out effect",
abstract = "This paper exploits the 2000s commodity price boom to identify the impact of oil revenues on domestic taxation in oil exporting countries. It estimates the average effect of oil revenues on non-resource taxation for 19 oil exporting countries using synthetic control methodology and finds that non-resource tax per capita is on average 14% lower in oil exporting countries because of the 2000s commodity price boom compared to a scenario without price shock. This result confirms the existing literature concerned with the resource revenues vs domestic taxation debate. Additional knowledge is derived from the synthetic control method showing that the effect is heterogeneous and occurs only in oil exporting countries with a low level of institutional quality, which are highly oil dependent and prefer the use of tax instruments rather than non-tax instruments. Furthermore, the dynamics of the effect differs in countries with a state-owned oil sector compared to a private-owned oil sector. These findings are new within the debate and contribute to our understanding of the effect of natural resources on domestic taxation. Policy makers concerned by a crowding-out effect should invest the oil dividend to improve their tax administration to avoid the negative consequences accompanying low domestic taxes such as the resulting dependency on a volatile income stream from oil, difficulty in achieving non-fiscal objectives, and lack of positive externalities from taxes such as transparency and better governance.",
keywords = "Natural resources, Oil boom, Oil revenues, Synthetic control methodology, Tax revenue",
author = "Michael Keller",
note = "Funding Information: The author thanks the anonymous reviewers for their comments that helped improving the manuscript. Moreover, the author thanks Richard Tol, Sambit Bhattacharyya, Andrew Newell, Rick van der Ploeg, Eva-Maria Egger and the participants of the Sussex Economics PhD conference for many helpful comments. Publisher Copyright: {\textcopyright} 2022 Elsevier Ltd",
year = "2022",
month = jun,
doi = "10.1016/j.resourpol.2022.102560",
language = "English",
volume = "76",
journal = "Resources Policy",
issn = "0301-4207",
publisher = "Pergamon Press",

}

RIS

TY - JOUR

T1 - Oil revenues vs domestic taxation

T2 - Deeper insights into the crowding-out effect

AU - Keller, Michael

N1 - Funding Information: The author thanks the anonymous reviewers for their comments that helped improving the manuscript. Moreover, the author thanks Richard Tol, Sambit Bhattacharyya, Andrew Newell, Rick van der Ploeg, Eva-Maria Egger and the participants of the Sussex Economics PhD conference for many helpful comments. Publisher Copyright: © 2022 Elsevier Ltd

PY - 2022/6

Y1 - 2022/6

N2 - This paper exploits the 2000s commodity price boom to identify the impact of oil revenues on domestic taxation in oil exporting countries. It estimates the average effect of oil revenues on non-resource taxation for 19 oil exporting countries using synthetic control methodology and finds that non-resource tax per capita is on average 14% lower in oil exporting countries because of the 2000s commodity price boom compared to a scenario without price shock. This result confirms the existing literature concerned with the resource revenues vs domestic taxation debate. Additional knowledge is derived from the synthetic control method showing that the effect is heterogeneous and occurs only in oil exporting countries with a low level of institutional quality, which are highly oil dependent and prefer the use of tax instruments rather than non-tax instruments. Furthermore, the dynamics of the effect differs in countries with a state-owned oil sector compared to a private-owned oil sector. These findings are new within the debate and contribute to our understanding of the effect of natural resources on domestic taxation. Policy makers concerned by a crowding-out effect should invest the oil dividend to improve their tax administration to avoid the negative consequences accompanying low domestic taxes such as the resulting dependency on a volatile income stream from oil, difficulty in achieving non-fiscal objectives, and lack of positive externalities from taxes such as transparency and better governance.

AB - This paper exploits the 2000s commodity price boom to identify the impact of oil revenues on domestic taxation in oil exporting countries. It estimates the average effect of oil revenues on non-resource taxation for 19 oil exporting countries using synthetic control methodology and finds that non-resource tax per capita is on average 14% lower in oil exporting countries because of the 2000s commodity price boom compared to a scenario without price shock. This result confirms the existing literature concerned with the resource revenues vs domestic taxation debate. Additional knowledge is derived from the synthetic control method showing that the effect is heterogeneous and occurs only in oil exporting countries with a low level of institutional quality, which are highly oil dependent and prefer the use of tax instruments rather than non-tax instruments. Furthermore, the dynamics of the effect differs in countries with a state-owned oil sector compared to a private-owned oil sector. These findings are new within the debate and contribute to our understanding of the effect of natural resources on domestic taxation. Policy makers concerned by a crowding-out effect should invest the oil dividend to improve their tax administration to avoid the negative consequences accompanying low domestic taxes such as the resulting dependency on a volatile income stream from oil, difficulty in achieving non-fiscal objectives, and lack of positive externalities from taxes such as transparency and better governance.

KW - Natural resources

KW - Oil boom

KW - Oil revenues

KW - Synthetic control methodology

KW - Tax revenue

U2 - 10.1016/j.resourpol.2022.102560

DO - 10.1016/j.resourpol.2022.102560

M3 - Journal article

AN - SCOPUS:85123219551

VL - 76

JO - Resources Policy

JF - Resources Policy

SN - 0301-4207

M1 - 102560

ER -

ID: 291538927