Domestic Resource Mobilization Research Articles

Scaling Up Domestic Resource Mobilization Via Non-Tax Revenues: Is The Government Directive Sustainable?

The paper critiques Tanzania’s fifth phase government’s directive under then President John Pombe Magufuli aimed at boosting domestic resource mobilization through non-tax revenues. Using a descriptive qualitative method approach, it examines the directive’s impact on key institutions contributing to the Treasury Consolidated Fund. Analysis of data from various sources, including government reports and face-to-face interviews with key officials from the selected public institutions and statutory corporations, reveals mixed results: while some institutions improved revenue mobilization due to better governance and technology, others struggled, even dipping into limited funds to comply with the government directive; in turn, this lead to undermine the performance of some of the statutory institutions in meeting their obligations. The study suggests that sustainable non-tax revenue strategies require institutionalized policies aligned with enhanced institutional capacities. It highlights the importance of efficient use of resources for socio-economic development. The paper underlines the ongoing reforms under the Office of the Treasury Registrar to transform the office into a Public Investment Management Authority, aiming at improving the institutionalization of non-tax revenues, boosting the performance effectiveness and non-tax revenue collection. It calls for long-term, standardized approaches to non-tax revenue mobilization for sustainable development. It cautions against the adoption of ad hoc measures that may adversely affect the performance of public institutions. This study is significant to the scholarship on governance and resource mobilization and cautions leaders and policymakers about the consequences of their decisions.

Inflation, exchange rate, and economic growth in Ethiopia: A time series analysis

This study aims to investigate the dynamic relationship between inflation, exchange rate, and economic growth in Ethiopia for the period 1991–2020. This is because of rampant inflation, continuously devalued domestic currency, and the declining growth rate of the country due to violent conflicts. The study uses the ARDL model for short-run and long-run dynamics, the Bound test of co-integration to confirm if the target variables go together or not, and Granger causality tests are performed to detect dynamic effects. The ARDL model estimates suggested that inflation and exchange rate are negatively related to economic growth. This implies that an increase in the price level reduces the production of goods and services, while devaluation has a negative impact by reducing imports of intermediate goods. Thus, increasing domestic resource mobilization, improving regulatory quality, and deepening the financial sector can be viewed as solutions to decrease chronic foreign exchange shortages, lower inflation, and boost economic growth rates.

THE PAKISTAN FACTOR IN SOUTH ASIA AND CENTRAL ASIA RELATIONS

This article discusses the multilateral relations between Pakistan and Central Asia. Pakistan's experience of unstable development is the result of our over-reliance on foreign aid and exogenous factors. To ensure a stable and sustainable trajectory of high growth, we focus on endogenous factors of growth such as domestic resource mobilisation, tax reforms, science, technology and innovation, stimulating export growth and we attract foreign direct investment. Remittances have provided significant support for our financial needs, but their true potential has not been realized. We will introduce reforms to increase remittances by offering incentives. Nevertheless, in order to achieve this long-term goal, we need to build a solid and self-sustaining platform using external funding sources in the medium term.

Measuring Illicit Financial Flows: New Data and Methods

A major source of illicit financial flows (IFFs) out of developing countries accrues from the under-invoicing of commodity exports. This erodes the tax base of resource-rich developing countries, and hence their capacity to mobilise domestic resources for development. The Sustainable Development Goals (SDGs), adopted in 2015, specifically call on states to reduce IFFs and enhance domestic resource mobilisation. Yet a weak capacity to assess the magnitude and drivers of the phenomenon has limited the ability of developing countries to effectively curb IFFs. This has been compounded by a lack of consensus over IFF definitions together with poor data and weak methods. Drawing on six years of interdisciplinary research into commodity trade–related IFFs, this chapter examines novel data sources and recent methodological advances that researchers and regulators can draw upon to better capture and eventually reduce IFFs. It situates such advances within the fast-expanding literature on domestic resource mobilisation, taxation and IFFs, focusing on three major channels; namely, trade mispricing, abusive transfer pricing and tax evasion through wealth offshoring. The chapter concludes by discussing the scope for improved data collection and evidence generation. This, together with global taxation reform, can greatly contribute to effectively enhancing domestic resource mobilisation in developing countries.

Position and Trends of Resource Gap in Nepal

Nepal's budget shortfall stems from excessively high recurring expenses, constituting over 60% of the government's total spending. Conversely, capital expenses linger below 20%. This imbalance highlights an unfriendly stance towards growth in the budget deficit, necessitating reduction. This study has examined the position and trends of resource gap in Nepal for which the source of the data used in the analysis was secondary. The data has been collected for the period 1986-87 to 2021-22 from the Central Bureau of Statistics (CBS) under the National Planning Commission (series of GDP). Descriptive statistics and trend analysis is used for secondary data analysis. A Statistical Package for Social Sciences (SPSS) software was used for data analysis for the study. The results revealed that Nepal is facing huge resource gap because of inability to raise revenue in comparison with the growing expenditure. To finance this huge resource gap the government is taking loans – both internal and external. Net outstanding public debt is increasing significantly. Government efforts should be placed on the mobilization of domestic resources for financing regular and development expenditure because foreign loan may be a great burden to the future.

The Moderating Effect of Digitalisation on the Relationship between Corruption and Domestic Resource Mobilisation: Evidence from Developing Countries

Purpose: Domestic Resource Mobilisation (DRM) is vital for government financing of essential sectors like infrastructure, education, and healthcare, but corruption impedes revenue collection and erodes trust in government institutions. Nevertheless, digitalisation offers a promising way to combat corruption and improve DRM. This study aims to explore how digitalisation can enhance transparency and efficiency in addressing these issues by specifically investigating how digitalisation can moderate the relationship between corruption and DRM in developing nations. Methodology: Utilizing panel data of 65 developing countries from 2007 to 2019, a Panel Corrected Standard Errors (PCSE) estimator was employed. Findings: The findings indicate that corruption negatively affects DRM, while digitalisation has a positive influence. Importantly, digitalisation was found to moderate the adverse impact of corruption on DRM, albeit after a certain threshold level of digitalisation. Across regions, the net effect of this interaction varied, with some regions experiencing negative consequences. Notably, the existence of a threshold level of digitalisation above which its influence becomes more pronounced in mitigating corruption's impact on DRM revealed that the association is non-linear. Originality: This study addressed an important gap in the literature by examining how digitalisation moderates the connection between corruption and DRM in developing countries, offering nuanced insights into the feasibility of leveraging digital technologies to bolster revenue mobilisation despite corruption challenges. Implication: These results have significant implications for policymakers, highlighting the potential of digitalisation to enhance revenue mobilisation and combat corruption in developing countries, albeit with context-specific considerations.

Trends and Challenges of Health Care Financing in Nigeria

Introduction: Health care financing is concerned with how financial resources are generated, allocated and used in health care system. Worldwide, every year 100 million people are pushed into poverty because they have had to pay directly for their health care. Objective: To assess the trends and challenges of health care financing in Nigeria. Methodology: A literature review was conducted. Results: In Nigeria, health care is financed through Tax revenues, out of pocket payments (user payment), health insurance (social, community-based insurance, private health care financing), donor funding, exemptions/deferrals/subsidies. Majority (69%) of the health care financing in Nigeria is from out-of-pocket payments made by the patient to the health care provider. The federal government provides 12% of health care finances. The rest of financing of health care in Nigeria come from the state governments (8%), Local Government areas (4%), and development/donor partners (3%). Nigeria allocates between 3.5% and 6.24% of her total budget to health care financing. The challenges of health care financing in Nigeria include: inefficiency of the health system across the country, limited institutional capacity, corruption, unstable and dwindling economic, and lack of political will. Conclusion: Nigeria’s expenditure on health is very low, and domestic resource mobilization for health care is weak. Nigeria’s health system has to be strengthened. Nigeria also has to inject more fund into health care for its citizens. She should embrace equitable modes of health care financing such as compulsory social insurance system for all citizens of Nigeria. The role of different levels of government in financing health care should be clearly defined. Also, prudent management of available scarce funds will go a long way in changing the Nigerian health care financing situation. The private sector (telecommunications and banks) and local philanthropists has to be involved in financing health care. There should be effective monitoring and evaluation (M&E) of performances and tracking of the use of resources, health policies and reforms.

Rethinking Development in Latin America

ABSTRACT Latin American countries face a crossroad that demands profound change in their development paradigm. In the last four decades economic growth, investment, and productivity have shown poor performance. This has made it impossible to break with the productive heterogeneity that characterises the region and its dependence on low value-added productive sectors and commodity-dependent export structures. Although there has been a positive advance in human development, high levels of inequality, poverty, social exclusion, and high labour market informality have been persistent in the countries of the region. Added to these structural problems is the need to face climate change, that has important distributive and social effects and requires a significant amount of investment in adaption and mitigation a will require a change in the development paradigm. A fiscal sustainability framework will be essential to ensure the viability of the public spending required to promote structural change. The framework should prioritise domestic resource mobilisation, through public revenues, which have historically been insufficient to meet the demands for public spending.

Development Strategies for Africa: Lessons from Asia, Europe, USA and Canada

The study analyzed development strategies for Africa with specific emphasis on lessons from the developed countries of Europe, Asia, the United States of America, and Canada. Development is akin to a sustainable livelihood, hence, the need for a country to devise means for the achievement and maintenance of accelerated improvements in the holistic affairs of the people and their environs. The objectives of the study were to analyze major development strategies suitable for African countries, identify challenges of development strategies in African countries and proffer solutions to ameliorate them. The Economic Theory of Modernization was adopted for the study. The qualitative research methodology which is mainly descriptive was adopted for the study through the use of secondary sources of data like internet sources, textbooks, journals, etc. It was discovered that primary exports and diversification, Foreign Direct Investment (FDI); planned use of external aids, natural resources economics, and domestic resource mobilization, constitutes major development strategies for the underdeveloped and developing countries of Africa. It was also discovered that problems of unorganized vision and plans, corruption, poor funding, ineffective tax administration system and poor plan implementation and evaluation limit the success of development strategies in African countries. It was recommended that special funds for development plans should be independent of the general budget and agencies of implementation and evaluation should be created for any development plan or programme.

A SCHOLARLY CONSIDERATION ON THE THEORIES AND LITERATURE OF TAX REFORMS IN SIERRA LEONE

<p>This study examines how tax reforms have been implemented and how it has influenced Sierra Leone's ability to streamline fiscal structures. The topic of tax revenue mobilization is becoming more and more popular and crucial for emerging nations. The fiscal arrangement that exists between taxpayers and the current political administration is a fiduciary relationship that binds both parties to the right and obligation to effectively and efficiently mobilize revenues. The tax system in use has had a significant impact on government revenue since it allows for loopholes, dishonest tax authorities, inadequate data, and many other issues. This study also applauds the government for strengthening corporate tax authority plans and putting local restrictions on large corporations and foreign governments who conduct business in Sierra Leone. By doing this, taxpayers and tax authorities will be encouraged to be accountable, transparent, and compliant. Additionally, Sierra Leone's tax administration underwent a number of modifications between 2014 and 2019, although nothing is known about how well those reforms fared in terms of raising tax revenue. In fact, reform as a factor affecting tax collection has received little attention in the research on what motivates domestic resource mobilization. The paper evaluates whether reforms are crucial for raising tax revenue by taking into account various aspects of reforms in the tax administration, including tax-related reforms and reforms related to institutions, and using various econometric methods based on ordinary least squares, instrumental variable two-stage least squares, and iteratively reweighted least squares. According to the findings, tax reforms, institutional reforms, and all other reforms put together have greatly improved tax revenue performance. The main takeaway is that greater institutional and tax-related reforms are essential for sustainingly increasing tax revenue collection.</p><p><strong> </strong></p><p><strong>JEL</strong>: E61, E62, P35</p><p> </p><p><strong> Article visualizations:</strong></p><p><img src="/-counters-/soc/0057/a.php" alt="Hit counter" /></p>

Determinants of enrollment in community based health insurance program among households in East Wollega Zone, west Ethiopia: Unmatched case-control study.

Ethiopia has launched a community-based health insurance (CBHI) since 2011, which is an innovative financing mechanism to enhance domestic resource mobilization and sustainable health financing. This study assessed determinants of CBHI enrollment among HHs (households) of East Wollega, Ethiopia, 2022. Community based unmatched 1:2 case-control study design was conducted between Jan 7and Feb 5/2022 among 428 HHs (144 cases and 284 controls). Cases were selected from HHs who registered for CBHI and currently using CBHI. Controls were from those who do not registered for CBHI membership. Data collected using a semi-structured, interview administered questionnaire. Multivariable logistic regression with SPSS version 25 was employed for analysis and variables were declared statistical significant association at p-value < 0.05, 95% CI. Data from 428 (144 cases and 284 controls to CBHI) were collected; a response rate of 98.8%. Statistically lower odds of CBHI enrollment was observed among HHs who have poor knowledge [AOR = 0.48 (95% CI:0.27, 0.85)], perceived not respectful care [AOR = 0.44 (95% CI :0.24, 0.81)], unavailability of laboratory services [AOR = 0.37(95% CI:0.21, 0.66)], inappropriate time of premium payment [AOR = 0.31(95% CI:0.18, 0.52)]. In addition, medium wealth status category [AOR = 0.11(95% CI: 0.03, 0.45)]. Higher odd of CBHI enrollment observed among who have formal education [AOR = 2.39(95% CI: 1.28, 4.48)]. Educational level, knowledge, time of membership payment, laboratory test availability, perception of respectful care and wealth status were significant determinants of CBHI enrollment status. Hence, the responsible bodies should discuss and decide with community on the appropriate time of premium payment collection, and enhance community education on CBHI benefit package.

Recovery of Routine Immunisation: Mapping External Financing Opportunities for Reaching Zero-Dose Children.

The COVID-19 pandemic has precipitated large declines in childhood vaccination coverage and, consequently, substantial increases in the number of zero-dose children. To effectively respond to these declines, it is necessary to direct resources for recovery. We mapped active external financing for immunisation and primary healthcare in 20 countries with the highest numbers of zero-dose children to promote transparency and donor coordination. We found that countries have disparate access to external financing, with the two upper-middle-income countries (Brazil and Mexico) only having access to loans from the International Bank for Reconstruction and Development. Domestic resource mobilization is, therefore, key in these two countries, although fiscal space is likely constrained. Four additional countries (Angola, Indonesia, Philippines, and Vietnam) do not have allocations from Gavi, the Vaccine Alliance for Health Systems Strengthening, or Equity Accelerator Funding, but are eligible for support under Gavi's Middle-Income Countries Approach. Our methods, which focus on current donor financing, are novel and reveal substantial variations in access to external financing to support immunisation in high-burden countries. The available data differ considerably across financing mechanisms, making it difficult to synthesise the results across funding sources.

A STRATEGIC DEVELOPMENT FINANCE APPROACH IN ALLEVIATING POVERTY IN CAMEROON

A large funding gap looms on the horizon as the 2030 deadline for bringing an end to poverty worldwide gradually approaches. The number of poor people in the world reduced to 10% in 2015 but this number is expected to rise particularly in sub-Saharan Africa due to the Covid-19 pandemic. In Cameroon, despite experiencing sustained economic growth in the last decade, the country still suffers from chronic underdevelopment and poverty rate is high at a 37.5% estimate since 2014 particularly in rural areas due to insufficient mobilisation of development funds. The country’s weak capacity to effectively mobilise development funds have severely hindered developments efforts and the fight against poverty in Cameroon. Government programmes aimed at ameliorating and improving the living and social conditions of Cameroonians as originally intended have largely failed. This study examined Development Finance and Poverty as the core concepts and tried to establish a hypothetical relationship between development finance and poverty alleviation in Cameroon. The study was guided by the epistemology of positivism and followed the conclusive case study design. A sample of 407 participants using multi-stage sampling was drawn from the centre region of Cameroon. Questionnaire was used to collect data that was analysed using statistical packages such as SPSS 23 and AMOS 24. Hypotheses were tested using structural equation modelling. The results revealed that private domestic funds and public domestic funds both have a significant positive effect on poverty alleviation in Cameroon. The study further revealed that Public Domestic Funds has a significant positive mediating effect on the relationship between private domestic funds and poverty alleviation in Cameroon. Based on these results, the study concluded that domestic resource mobilisation is a more important source of development funds to alleviate poverty in Cameroon than external resource mobilisation. The study thus recommended a strategic development finance model for poverty alleviation in Cameroon.

Asymmetric effect of tax systems on poverty and inequality: Exploring the distributional impact of domestic resource mobilization systems in Ghana

Asymmetric effect of tax systems on poverty and inequality: Exploring the distributional impact of domestic resource mobilization systems in Ghana

Proposals for a UN Tax Agreement

The introduction of a UN Tax Convention (UNTC) is gaining increasing support from governments, civil society, and the UN Secretary-General. The UNTC would fill an important regulatory gap in global economic governance, promote tax justice, and improve domestic resource mobilization. It is considered a central innovation to address harmful tax competition, reduce tax evasion and illicit financial flows, and ensure the fair distribution of taxing rights among countries. This article presents the status of negotiations and current proposals for the design and content of the UNTC.

An Analysis of Budget Deficits, Debt Accumulation, and Debt Instability

In Pakistan all the macro indicators have been adversely affected by the persistently high deficits and the strategy adopted to finance them in the last two decades. The excessive domestic borrowing at high rates to finance deficits without any attempts at domestic resource mobilisation and controlling of the deficits over extended periods absorbed all available domestic and external resources. The resulting debttrap led to increased external borrowings at high rates with short-term maturity. This, coupled with massive exchange rate depreciation throughout the last two decades, resulted in rapid debt accumulation. The recent fiscal space created in the wake of events of 9/11, resulting in high reserves, follows considerable debt relief and availability of massive funds on very soft terms. However, the decline in budget deficit continues to occur at the expense of development expenditure, along with some increase in tax revenues. This trend in expenditure needs to be reversed if serious progress in debt reduction is the aim.

Saving-investment Behaviour in Pakistan: An Empirical Investigation

Saving and investment are two key macro variables with micro foundations which can play a significant role in economic growth, inflation stability and promotion of employment especially if seen in the context of a developing country. For self-reliance and growth objectives, mobilisation of domestic resources and their efficient utilisation are the two major policy oriented focuses today [Khan (1993)]. National savings are critically important to help maintain a higher level of investment which is a key determinant for economic uplift. Thereby, necessitating the analysis of saving-investment behaviour and its determinants for policy implications; this is a demanding area because of continuing debate on the potential role of their determinants.

Trade misinvoicing and domestic resource mobilization in Nigeria

PurposeMobilizing domestic resources has been a daunting task for the Nigerian government given its growing fiscal responsibilities and the limited domestic resources at its disposal. However, little is known empirically about the role trade misinvoicing plays in this regard. Hence, this study evaluates the effect of trade misinvoicing on domestic resource mobilization in Nigeria.Design/methodology/approachSourcing annual data spanning 1981–2018 on key variables of interest, this study adopts the Dynamic Ordinary Least Squares (DOLS) estimation method to evaluate the effect of trade misinvoicing on domestic resource mobilization in Nigeria.FindingsIn conformity with extant studies, the result reveals that trade misinvoicing adversely affects domestic resource mobilization. It also showed that domestic resources are highly sensitive to the dynamics of trade misinvoicing in Nigeria. Other determinants of domestic resource mobilization in Nigeria include public debt, official development assistance, trade openness and inflation.Practical implicationsThe study suggests the need to take expeditious and pragmatic actions against the rising tides of trade misinvoicing in Nigeria with a view to improving the volume of domestic resources required for financing development objectives. This will facilitate the achievement of the Sustainable Development Goals (SDGs) and enable Nigeria to maximally enjoy gains from trade.Originality/valueThere is an overwhelming evidence on the effect of foreign capital inflows on the Nigerian economy but, little is known about the effects of foreign capital outflows. Specifically, there is a dearth of studies on the effect of trade misinvoicing on domestic resource mobilization, particularly for Nigeria. Therefore, this study fills this knowledge gap by evaluating the effect of trade misinvoicing on domestic resource mobilization in Nigeria.

Економічна стійкість у контексті інституційної логіки

Economic resilience of the system is one of the main indicators that characterizes its qualitative and quantitative aspects, response to external and internal shocks and challenges. The problem of resilience becomes especially important in extreme situations (economic and financial crises, ecological and natural disasters: typhoons, floods, earthquakes, etc., political revolutions, military conflicts). The current Russian-Ukrainian war has become a serious test of the stability of the domestic economy, in which relative macroeconomic balance is ensured in extremely difficult conditions due to the maximum mobilization of domestic resources and effective foreign aid. An important component is institutional stability, i.e. operational response to changes in the economic situation of authorities and management at all levels, legislative institutions, financial and banking institutions, foreign economic sphere, attention to such attributes of institutionalism as trust, social optimism, mentality, traditions, habits, etc. In a generalized form, at the theoretical level, institutional sustainability is proposed to be considered in the article in the context of institutional logic in three hypostasises at the micro-, macro-, and geo-economic levels. Institutionalism, including economic theory, is dominated by traditional, formal logic, which mainly uses natural (scientific) language. Consciously or intuitively, the main laws of logic are taken into account: identity, contradiction, the Law of Exclusion, sufficient reason. The logic of evolutionism is considered the basis of institutional logic, which provides a general idea of changes in all components of the institutional environment. In the institutional economic theory, two levels of institutional logic are visible: the macro level (Veblen and the old American school, North) and the micro level (Coase, Williamson, etc.). In the publications of the last quarter of the 20th century the logic of the global (mega) level is also analyzed. Evolutionism is the basis of the logical construction of institutional logic in economic theory. Generalizing indicators that synthesize different approaches of institutional logic regarding economic sustainability are the institutional logic of sustainability (ILS) and the logical index of sustainability (LIS). Institutional logic of the micro- level was initiated by R. Coase, continued by O. Williamson and others. The logic of transaction costs of R. Coase is formulated in two theorems: regarding zero costs, ownership and economic results, and the principle of internalization. The second theorem was called "comparative logic of economic organization". In critical relation to both of Coase's theorems, they remain basic constructs of micro-level resilience. Among the indicators and criteria of macro-level economic resilience, monetary components are of leading importance, which, under the conditions of a free market, provide a kind of warning signals to the economic system as a whole. A feature of this approach was the transformation of the monetary component into a system of "monetary and financial analysis". This reflects fundamental qualitative changes in recent decades regarding the structure of the economy, in which the financial subsystem acquires dominant (key) importance, affecting aggregated macroeconomic indicators: growth, inflation, employment, etc. Globalization, that is, the mega-level, its economic resilience, inevitability and irreversibility are characterized by three deterministic logics: technical (technological), economic and political.

World’s first platform to track SDG data financing: Clearinghouse for financing development data

While some progress has been made towards the implementation of the Cape Town Global Action Plan for Sustainable Development Data over the past five years, a stumbling block for many low- and middle-income countries has been the urgent need for more resources to strengthen their national statistical systems. There is an urgent need to make financing for development data and statistics smarter, ensuring both the mobilisation of additional domestic resources and a more efficient approach to external assistance that would enable existing resources to go further and more effectively leverage new resources. It is in this context that the Bern Network on Financing Data for Development, a multi-stakeholder alliance created in 2019 by the Swiss Agency for Development and Cooperation and the Swiss Federal Statistical Office to promote more and smarter funding for development data, launched an innovative, free online platform that development cooperation recipients, providers and others can use to close the stark data financing gap: the Clearinghouse for Financing Development Data.