The relationship between economic growth and taxation: an empirical study on optimal taxation in sub-Saharan Africa
- Authors: Kent, Bradley Athol
- Date: 2022-10-14
- Subjects: Taxation Africa, Sub-Saharan , Optimal tax , Economic development Africa, Sub-Saharan , Tax collection Africa, Sub-Saharan
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/403058 , vital:69918
- Description: The relationship between economic growth and taxation is a complex and highly debated issue, this thesis investigates whether a significant relationship can be identified, and whether it is the level that truly matters for fiscal policies aimed at being growth enhancing. Further investigation examines this relationship, in addition to testing whether there is a threshold below which tax collection may be considered ‘growth-enhancing’, and above which is negative for economic growth, and if such a threshold exists, to identify the manner in which taxation negatively impacts economic growth. The study makes use of a panel data approach to autoregressive distributed lag modelling and a generalised least squares regression. The study focuses on a panel data sample for seven (7) countries within Sub-Saharan Africa (SSA) between 1997 – 2017. It found that total tax revenue held a positive and significant relationship with economic growth at the SSA level, whilst at the individual tax level; PAYE and property taxes were found to have a negative influence on growth, with no other fiscal variables significantly influencing growth in the long run in SSA test. Whereas, when analysing at the country-specific level it was found PAYE was only significantly influencing growth in South Africa, where the relationship was found to be negative. Corporate tax revealed a similar significant negative relationship in Swaziland and Cameroon. In addition, property taxes revealed a significant and negative relationship in South Africa, yet in Rwanda the influence was positive. Overall, the study found that there is significant relationship between economic growth and taxation in the SSA context. However, when analysing the countries in isolation, no such relationship was found. , Thesis (MEcon) -- Faculty of Commerce, Economics and Economic History, 2022
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- Authors: Kent, Bradley Athol
- Date: 2022-10-14
- Subjects: Taxation Africa, Sub-Saharan , Optimal tax , Economic development Africa, Sub-Saharan , Tax collection Africa, Sub-Saharan
- Language: English
- Type: Academic theses , Master's theses , text
- Identifier: http://hdl.handle.net/10962/403058 , vital:69918
- Description: The relationship between economic growth and taxation is a complex and highly debated issue, this thesis investigates whether a significant relationship can be identified, and whether it is the level that truly matters for fiscal policies aimed at being growth enhancing. Further investigation examines this relationship, in addition to testing whether there is a threshold below which tax collection may be considered ‘growth-enhancing’, and above which is negative for economic growth, and if such a threshold exists, to identify the manner in which taxation negatively impacts economic growth. The study makes use of a panel data approach to autoregressive distributed lag modelling and a generalised least squares regression. The study focuses on a panel data sample for seven (7) countries within Sub-Saharan Africa (SSA) between 1997 – 2017. It found that total tax revenue held a positive and significant relationship with economic growth at the SSA level, whilst at the individual tax level; PAYE and property taxes were found to have a negative influence on growth, with no other fiscal variables significantly influencing growth in the long run in SSA test. Whereas, when analysing at the country-specific level it was found PAYE was only significantly influencing growth in South Africa, where the relationship was found to be negative. Corporate tax revealed a similar significant negative relationship in Swaziland and Cameroon. In addition, property taxes revealed a significant and negative relationship in South Africa, yet in Rwanda the influence was positive. Overall, the study found that there is significant relationship between economic growth and taxation in the SSA context. However, when analysing the countries in isolation, no such relationship was found. , Thesis (MEcon) -- Faculty of Commerce, Economics and Economic History, 2022
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A quantitative analysis of the relationship between the 12 components of the Index of Economic Freedom (IEF) and the Human Development Index (HDI) scores within the 16 Southern African Development Community (SADC) nations
- Authors: Peel, Brendon Robert
- Date: 2021-10-29
- Subjects: Southern African Development Community , Quantitative research , Economic development Developing countries , Economic development Africa, Sub-Saharan , Economic development projects Africa, Sub-Saharan , Heritage Foundation (South Africa) , United Nations Development Programme , Index of Economic Freedom (IEF) , Human Development Index (HDI) , Resource Based Theory (RBT)
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191841 , vital:45171
- Description: Nations in Sub-Saharan Africa tend to experience some of the worst levels of human development and economic freedom in the world. Previous research has shown that there is a positive and significant correlation between these two macroeconomic facets. Further research has shown that if nations' policy-makers can manage their resources and capabilities appropriately, then this could improve their economic freedom and human development levels. This study aims to analyse the relationship between the scores of the 12 different components of the Index of Economic Freedom (IEF) and the overall Human Development Index (HDI) scores of Sub-Saharan African nations. The specific selection of nations utilised in the study are the 16 countries that make up the Southern African Development Community (SADC). Based on a review of the literature on human development, economic freedom, and the Resource Based Theory (RBT) on a macro-level, a correlational study was conducted to determine the relationship between the relevant variables. The information was collected from the Heritage Foundation and the United Nations Development Program (UNDP), respectively. The data and scores collected and used in the study are from the years 2015 to 2019. The correlational results demonstrated that nine of the 12 components of the IEF has a positive and significant correlation with HDI within the selected African nations. The strongest correlation being between 'Property Rights' and HDI. Therefore, it is likely that if the property rights within a nation are upheld, said nation would have higher levels of human development. The three components that proved to have an insignificant result with HDI were; 'Tax Burden', 'Government Spending', and 'Fiscal Health'. The results indicate that all components that fall under the category of 'Government Size' share no significant correlational relationship with human development. It is recommended that governments and policy-makers take this into consideration when managing their resources and capabilities to improve the nation's human development. Further research is required to identify the specifics on how this management and allocation of resources can be utilised effectively to improve the human development and economic freedom in Sub-Saharan Africa. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
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- Authors: Peel, Brendon Robert
- Date: 2021-10-29
- Subjects: Southern African Development Community , Quantitative research , Economic development Developing countries , Economic development Africa, Sub-Saharan , Economic development projects Africa, Sub-Saharan , Heritage Foundation (South Africa) , United Nations Development Programme , Index of Economic Freedom (IEF) , Human Development Index (HDI) , Resource Based Theory (RBT)
- Language: English
- Type: Master's theses , text
- Identifier: http://hdl.handle.net/10962/191841 , vital:45171
- Description: Nations in Sub-Saharan Africa tend to experience some of the worst levels of human development and economic freedom in the world. Previous research has shown that there is a positive and significant correlation between these two macroeconomic facets. Further research has shown that if nations' policy-makers can manage their resources and capabilities appropriately, then this could improve their economic freedom and human development levels. This study aims to analyse the relationship between the scores of the 12 different components of the Index of Economic Freedom (IEF) and the overall Human Development Index (HDI) scores of Sub-Saharan African nations. The specific selection of nations utilised in the study are the 16 countries that make up the Southern African Development Community (SADC). Based on a review of the literature on human development, economic freedom, and the Resource Based Theory (RBT) on a macro-level, a correlational study was conducted to determine the relationship between the relevant variables. The information was collected from the Heritage Foundation and the United Nations Development Program (UNDP), respectively. The data and scores collected and used in the study are from the years 2015 to 2019. The correlational results demonstrated that nine of the 12 components of the IEF has a positive and significant correlation with HDI within the selected African nations. The strongest correlation being between 'Property Rights' and HDI. Therefore, it is likely that if the property rights within a nation are upheld, said nation would have higher levels of human development. The three components that proved to have an insignificant result with HDI were; 'Tax Burden', 'Government Spending', and 'Fiscal Health'. The results indicate that all components that fall under the category of 'Government Size' share no significant correlational relationship with human development. It is recommended that governments and policy-makers take this into consideration when managing their resources and capabilities to improve the nation's human development. Further research is required to identify the specifics on how this management and allocation of resources can be utilised effectively to improve the human development and economic freedom in Sub-Saharan Africa. , Thesis (MBA) -- Faculty of Commerce, Rhodes Business School, 2021
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