Ethiopia’s tax-to-GDP ratio has remained persistently low, averaging only 6.5% over the past three decades. This paper investigates short-run and long-run associations (not structural causal effects) of tax revenue from 1990 to 2023, incorporating a comprehensive set of economic, structural, and institutional variables. Using the ARDL bounds testing approach with a parsimoniously specified model to avoid overfitting, given the sample size (N = 34 observations), a stable long-run cointegrating relationship is found. In the core model, GDP growth, trade openness, VAT, and digital tax administration (ITAS) show significant positive associations, while inflation, agriculture share, the shadow economy, and conflict intensity show significant negative associations. Robustness specifications that add manufacturing share, FDI, and corruption perception yield results consistent with these core associations. The error correction term (−0.431) indicates a relatively rapid adjustment speed. A novel conflict intensity index is constructed that captures the full spectrum of Ethiopia’s conflicts, including the Eritrean-Ethiopian war (1998–2000), the Ogaden insurgency (1992–2018), the Tigray conflict (2020–2022), and ongoing instability, providing robust evidence that conflict is negatively associated with tax revenue. Causal claims are avoided; results are conditional correlations. The findings underscore the need for structural transformation, formalization of the informal economy, prudent FDI incentive design, and peace-building to strengthen domestic revenue mobilization.
Consumption is a major driver of India’s economic growth. Digital payment instruments provide more convenient and faster payment for goods and services. This study examines the impact of women’s use of digital financial services on household expenditure behaviour, and explores the underlying mechanisms. Using the 2019 All India Debt and Investment Survey (AIDIS) data, we employ the propensity score-matching estimator to address selection bias associated with the adoption of digital financial services. The empirical results suggest that women with access to digital finance exhibit a 23.9 percentage points higher monthly per capita household consumption expenditure than those without access. A heterogeneity analysis suggests that urban and wealthier households experience a more positive effect of digital finance on consumption expenditure relative to their counterparts. Further analysis indicates that lower transaction costs and women’s intrahousehold allocation are the primary mediating variables through which digital finance affects household consumption expenditure. The study suggests increasing supply-side efforts, local-language community training, and mitigating societal and cultural barriers promote digital finance adoption. Policies should facilitate effective use of digital finance among significantly associated groups, particularly in rural households, thus contributing to inclusive development and achievement of Sustainable Development Goals (SDGs) 5 and 12.
This study examines taxpayers’ perceptions of tax enforcement in Tanzania and their implications for perceived tax compliance and policy reform. The study identifies critical perception gaps undermining enforcement legitimacy using nationally representative data from the 2021 Afrobarometer Survey (round 8) and a generalised ordered logit model. Key findings reveal that trust in tax officials and autonomy of the Tanzania Revenue Authority (TRA) strongly predict compliance. Corruption perceptions reduce the probability of full compliance by 37–83 percent. Significant disparities emerge between urban and rural contexts, with rural residents and informal sector actors perceiving enforcement as weak and inequitable, driving evasion (52.4 percent engage in tax avoidance). The analysis further exposes how perceived unfairness in burden-sharing—particularly the under-taxation of high-income earners erodes voluntary compliance. The study argues that effective tax enforcement requires institutional reforms and perceived legitimacy. Policy recommendations include: (1) securing TRA’s operational autonomy to depoliticise enforcement; (2) deploying mobile tax units and simplified presumptive schemes for rural/informal sectors; (3) anti-corruption measures (e.g. AI-audit systems, transparency portals); and (4) nationwide tax literacy programs to align enforcement with fairness expectations. This study provides empirical grounding for reimagining enforcement as a trust-based, context-sensitive tool for sustainable revenue mobilisation.
Peer-to-peer (P2P) lending platforms convert borrower information into credit grades, yet little is known about how they interpret the stated purpose of a loan. Drawing on signaling theory, this study examines whether working capital financing purpose, accounts receivable (AR) versus accounts payable (AP) financing, moderates the relationships between loan amount, loan duration and interest rate and the credit grade assigned by Funding Societies, Malaysia’s largest P2P lending platform. Using 1,075 hand-collected SME loan listings and a partial proportional odds model, the study finds that the informational value of financing purpose depends on where in the grading scale it is used. AR financing is associated with a lower probability of medium-risk classification in every ordinal specification. Its association with high-risk classification strengthens with loan duration, a result robust to propensity score matching, and with loan amount, a result that does not survive matching. The interaction between financing purpose and interest rate has opposite signs at the low–medium and medium–high grade boundaries, indicating that the platform’s grade–price relationship differs by financing purpose. The study extends signaling theory by showing that, when an intermediary converts signals into ordered grades, one signal can carry different information at different decision boundaries.
This study examines the relationship between access to credit and gendered welfare outcomes in the Democratic Republic of Congo (DRC), a fragile and conflict-affected setting characterised by weak institutions, informal finance, and persistent socio-economic inequality. Drawing on theories of liquidity constraints, intra-household bargaining, and structural vulnerability, the study analyses two welfare dimensions using data from 1,243 households and 2,876 children aged 6–18. Youth welfare is measured by permanent school dropout, while women’s welfare is proxied by household asset accumulation, with particular attention to female-headed households. The analysis applies Ordinary Least Squares (OLS), inverse propensity weighting (IPW), and instrumental variable (IV) techniques, with IPW estimates treated as the primary basis for inference. The findings show that education-targeted credit is associated with lower school dropout among girls, while general credit has no meaningful association with schooling outcomes. The study further finds no significant association between credit access and asset accumulation among female-headed households, whereas male-headed households experience only modest and context-specific asset gains. Overall, the results suggest that financial inclusion alone is unlikely to generate transformative welfare gains in fragile settings without complementary institutional, market, and gender-sensitive support mechanisms.
