Tax reform and fiscal space in developing countries

  • Sèna Kimm GnangnonEmail author
  • Jean-François Brun
Original Paper


This paper investigates empirically the effect of tax reform on fiscal space in developing countries. The analysis has used an unbalanced panel dataset comprising 99 developing countries (of which 37 Least developed countries—LDCs) over the period 1980–2015. It has shown empirical evidence that tax reform is associated with greater fiscal space in developing countries, with this positive impact being particularly higher for LDCs than for the set of other countries in the full sample. Furthermore, the higher the degree of openness to international trade, the greater is the positive effect of tax reform on fiscal space. In light of the importance of securing greater fiscal space to finance development needs, policymakers in developing countries should pursue their tax reform in the context of greater trade openness, notably with the assistance of both bilateral partners (developed countries) and relevant international institutions.


Tax reform De Facto Fiscal Space Developing countries 

JEL Classification

H20 H30 E62 



The Authors would like to express their gratitude to the anonymous Reviewers for their useful comments on this article. The latter represents the personal opinions of individual staff members of the WTO and is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors or omissions are the fault of the authors.


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Copyright information

© Eurasia Business and Economics Society 2019

Authors and Affiliations

  1. 1.World Trade OrganizationGeneva 21Switzerland
  2. 2.CNRS, CERDIUniversité Clermont AuvergneClermont-FerrandFrance

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