Essays on tax revenue composition in developing countries.

Summary This thesis examines the composition of tax revenues in developing countries and considers its determinants and consequences. The first part analyzes the political economy factors that influence tax revenue composition, considering the impact of increased elections and democratization, while the second part examines the consequences of tax revenue composition choices in terms of tax revenue stabilization and social welfare. Several results emerge. Elections have a significant influence on the composition of tax revenues, as revenues from indirect taxes decline just before elections (Chapter 1). These manipulations to promote re-election appear to be more moderate in countries with longer established democracies. Moreover, Chapter 2 established that the existence of a more democratic political system, with strong constraints on the executive, allows for the increase in domestic tax revenues that is needed to offset the decline in tariff revenues. The second part of the thesis reveals interesting results on the effects of tax revenue composition on tax revenue stabilization and its social consequences. Chapter 3 highlighted the importance of addressing tax revenue instability insofar as it induces instability in public spending, which weakens the level of public investment. The increased contribution of consumption taxes to tax revenues was identified as stabilizing tax revenues. In addition, chapter 4 demonstrated that value-added taxes significantly reduce the instability of tax revenues in developing countries that have adopted them. The social impact of consumption taxes was compared with that of tariffs in Chapter 5 and it appears that tariffs are more regressive than consumption taxes in Burkina Faso.