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Taxation, Economic Growth and Political Stability

  • Society, Policy, Institutions and Governance
  • Published:
Transition Studies Review

Abstract

The study analyzed the effect of Political Stability (PS) and Economic Growth (GDP) on Tax and used Freedom of Corruption (FC) and Government Effectiveness (GE) as control variables. Study used unbalanced (includes 98 countries) as well as balanced (includes 57 countries) data for the period 2002–2008. Study found that all variables are non-normal. Further, it is found that PS affects tax in lower quantiles and somewhat higher quantiles but not in highest and intermediate quantiles. GE affects taxes in all quantiles but not in the highest level and value of the coefficient is also found to decreasing with the higher quantiles. Effect of GDP on tax is negative in all quantiles. Importantly, FC is found to be having negative effect at lower level of quantiles and positive at higher level of quantiles with increasing the coefficient value as quantiles increases.

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Notes

  1. This section is heavily drawn from Coad and Rao (Coad and Rao 2006).

  2. Buchinsky 1994 argued that the quantile regression solution i.e., \( \hat{\beta }_{0} \) is invariant to outliers of the dependent variable that tend to \( \pm \infty \).

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Authors and Affiliations

  1. Research scholar and Faculty of Applied Economics, Faculty of Management, ICFAI University Tripura, Kamalghat, Sadar, Agarthala, 799210, West Tripura, India

    Aviral Kumar Tiwari

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  1. Aviral Kumar Tiwari
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Correspondence to Aviral Kumar Tiwari.

Appendix

Appendix

See Tables 5, 6, 7

Table 5 Variables and their sources
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Table 6 List of analyzed countries in unbalanced panel
Full size table
Table 7 List of analysed countries in balanced panel data
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Tiwari, A.K. Taxation, Economic Growth and Political Stability. Transit Stud Rev 20, 49–61 (2013). https://doi.org/10.1007/s11300-013-0264-8

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  • DOI: https://doi.org/10.1007/s11300-013-0264-8

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