[G-MonD] N°11: Tax revenues, development and the fiscal cost of trade liberalization (1792-2006)

Note n°11 - August 2014

Title: “Tax revenues, development and the fiscal cost of trade liberalization (1792-2006)”
Authors: Julia Cagé, Lucie Gadenne
Abstract:

This research puts the recent evolution of tax revenues in developing countries in historical perspective. Using a novel dataset on total and trade tax revenues covering 130 countries from 1792 to 2006, we compare the fiscal cost of trade liberalization in developing countries and in today’s rich countries at earlier stages of development. We find 140 episodes of trade liberalization; these episodes led to larger and longer-lived decreases in total tax revenues in developing countries since the 1970s than in rich countries in the 19^th and early 20^th centuries. The fall in total tax revenues lasts more than ten years in half the developing countries in the sample which experienced an episode of trade liberalization.

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