Conflict and fiscal capacity

A. R. Chowdhury, Syed Mansoob Murshed

    Research output: Contribution to journalArticle

    3 Citations (Scopus)

    Abstract

    We examine the role of war in retarding state fiscal capacity in developing countries, measured by tax revenue ratios to GDP. We build a simple theoretical model of a factionalized state, where patronage substitutes for common interest public goods, along with violent contestation over a rent or prize. Our dynamic panel empirical analysis applied to 79 developing countries, during 1980–2010, indicates that war, especially civil war, retards fiscal capacity, along with imperfect democracy, political repression, poor governance, and dependence on oil and macroeconomic mismanagement. High intensity conflict is particularly destructive of state capacity. In countries experiencing low intensity wars, other institutional factors may matter more than war. The diminution of fiscal capacity due to war appears less pronounced after the end of the cold war.
    Original languageEnglish
    Pages (from-to)583-608
    JournalDefence and Peace Economics
    Volume27
    DOIs
    Publication statusPublished - 9 Sep 2014

    Fingerprint

    developing country
    tax revenue
    institutional factors
    repression
    clientelism
    public interest
    rent
    civil war
    macroeconomics
    cold war
    Fiscal
    governance
    democracy
    Developing countries
    Cold War
    State capacity
    Empirical analysis
    Substitute
    Patronage
    Dynamic panel

    Bibliographical note

    The full text is not available on the repository.

    Keywords

    • War
    • Civil war
    • State capacity
    • Fiscal capacity

    Cite this

    Conflict and fiscal capacity. / Chowdhury, A. R.; Murshed, Syed Mansoob.

    In: Defence and Peace Economics, Vol. 27, 09.09.2014, p. 583-608.

    Research output: Contribution to journalArticle

    Chowdhury, A. R. ; Murshed, Syed Mansoob. / Conflict and fiscal capacity. In: Defence and Peace Economics. 2014 ; Vol. 27. pp. 583-608.
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