Resource Curse Hypothesis in oil exporting countries and tax policy in rentier states

This study tests the hypotheses of “Resource Curse” for the taxation system incountries with abundant natural resources. The main question of the study is whetherthe tax revenues depend on the income gained from natural resources in the “RentierStates”. In the rentier states, natural resources can be a potentially disruptive factor forthe taxation system, which reduces the governmental revenue level while the nonrentierstates focus on taxation system to earn revenue. This research employs anunbalanced panel dataset to estimate seven models with random effects in fourteenselected oil-exporting countries during ۱۹۹۰-۲۰۱۴. Based on the results, the resourcecurse hypothesis is accepted, proving that tax is a sacrifice to the revenues of petroleumexportation in the sample countries. In the studied countries, the taxation system is notbased on the stable, reliable, and real economic players such as agriculture, trade,external debts, and international grants, but rather it is related to the oil and gasrevenues and corruption level. The authorities are advised to concentrate more on thetax infrastructure, rather than the oil revenues, to rise the stability, validity, andreliability of the governmental revenues.

Keywords:

Tax Revenue , Rentier States , Resource Curse , Oil-Exporting Countries