Transition Studies Review

, Volume 20, Issue 1, pp 49–61 | Cite as

Taxation, Economic Growth and Political Stability

Society, Policy, Institutions and Governance

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.

Keywords

Taxation Political stability Economic growth 

JEL Classification

H20 D70 C23 E62 H30 

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Copyright information

© CEEUN 2013

Authors and Affiliations

  1. 1.Research scholar and Faculty of Applied Economics, Faculty of ManagementICFAI University TripuraAgarthalaIndia

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