Konte, Maty

Ndubuisi, Gideon

English

We explore the heterogeneous effect of migrant remittances on citizens'support for taxation using a sample comprising 45,000 individuals fromthe Afrobarometer survey round 7 [2016-2018] across 34 Africancountries. To correct for unobserved heterogeneity, we endogenouslyidentify latent classes/subtypes of individuals that share similarpatterns on how their support for taxation is affected by theirunobserved and observed characteristics, including remittancesdependency. We apply the finite multilevel mixture of regressionsapproach, a supervised machine learning method to detect hidden classesin the data without a priori assumptions on class/subtype membership orhow remittance dependency affects support for taxation across theclasses. Our data is best generated by an econometric model with twoclasses/subtypes of individuals. In class 1 where more than two-thirdsof the citizens in our sample belong, we do not find any significantevidence that remittance dependence affects support for taxation.However, in class 2 where the remaining one-third of the citizensbelong, we find a significant negative effect of remittance dependenceon support for taxation. We further examine whether citizens' valuationof the quality of public services is an important factor in determiningthe classification of individuals into classes. We find that citizenswho have a positive appraisal of the quality of the public servicedelivery have a lower probability of belonging to the class/subtype inwhich depending on remittances reduces support for taxation

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Remittance dependence, support for taxation and quality of public services in Africa

https://cris.maastrichtuniversity.nl/files/106570782/wp2022_019.pdf

Remittance dependence, support for taxation and quality of public services in Africa

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Maastricht University Research Portal