Abstract/Details

Fiscal <i>faux pas</i>? An empirical analysis of the revenue and expenditure implications of trade liberalization


2002 2002

Other formats: Order a copy

Abstract (summary)

Trade liberalization tends to be an intrinsic part of structural adjustment programs due to its presumed beneficial effects on growth. Paradoxically however, trade reform policies can have fiscal effects that hinder growth and development.

This dissertation takes a critical look at the effect of trade liberalization on public finances across countries. It demonstrates how trade liberalization leads to declining tax revenues in developing countries. This occurs because the structural characteristics of developing economies limit their ability to make the transition from trade to domestic taxes. Moreover, devaluation of the currency, an integral part of the reform process, increases the burden of debt-servicing. The fiscal squeeze, consequent upon declining tax revenues and rising interest payments, adversely affects productive expenditures on physical and social infrastructure.

Using panel data for eighty developing and industrialized countries over 1970–98, a fixed-effects regression framework is employed to examine the evidence. The results indicate that trade liberalization has led to a fiscal squeeze in low-income countries with unfavorable consequences for infrastructure expenditures.

The cross-country analysis is supplemented by case-studies of three low-income economies; India, Ghana, and Malawi. The aim is to analyze why India and Malawi have suffered deleterious fiscal effects, while Ghana has not, even though the three economies have similar structural characteristics. In particular, does Ghana provide a set of “best-practices” to be adhered to and pitfalls to be avoided to ensure fiscal sustainability?

Indexing (details)


Subject
Economics;
Effects;
Trade liberalization;
Public finance;
Studies
Classification
0501: Economics
Identifier / keyword
Social sciences; Developing economies; Expenditure; Fiscal policy; Ghana; Globalization; India; Malawi; Revenue; Trade liberalization
Title
Fiscal <i>faux pas</i>? An empirical analysis of the revenue and expenditure implications of trade liberalization
Author
Khattry, Barsha
Number of pages
158
Publication year
2002
Degree date
2002
School code
0118
Source
DAI-A 63/06, Dissertation Abstracts International
Place of publication
Ann Arbor
Country of publication
United States
ISBN
9780493716558, 0493716556
Advisor
Rao, J. Mohan
University/institution
University of Massachusetts Amherst
University location
United States -- Massachusetts
Degree
Ph.D.
Source type
Dissertations & Theses
Language
English
Document type
Dissertation/Thesis
Dissertation/thesis number
3056249
ProQuest document ID
275661597
Copyright
Database copyright ProQuest LLC; ProQuest does not claim copyright in the individual underlying works.
Document URL
http://search.proquest.com/docview/275661597
Access the complete full text

You can get the full text of this document if it is part of your institution's ProQuest subscription.

Try one of the following:

  • Connect to ProQuest through your library network and search for the document from there.
  • Request the document from your library.
  • Go to the ProQuest login page and enter a ProQuest or My Research username / password.