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Abstract

Sub-Saharan Africa (SSA) has demonstrated slow progress in enhancing sustainable economic welfare evidenced by growing economic inequalities and disparities. This raises concerns regarding the efficacy of existing economic strategies and governance frameworks. Furthermore, there is a paucity of literature on the role of governance [GOV] in understanding the nexus between tax policy and economic welfare. We employed an ex-post facto research design. Based on data availability from 1996 to 2022, 36 SSA countries were considered in the study. Data was obtained from World Development Indicators (2022) and World Governance Indicators (2022). Data were analysed using the System-Generalized Method of Moments (SGMM). The Pedroni test for cointegration was used to capture the long-term relationships among the variables. The study concluded that tax policy and governance affected economic welfare in SSA. By enhancing households' ability to consume, these policies can alleviate poverty, and reduce inequality, we therefore recommend that tax revenue be used to fund social welfare programs or tax credits targeted at lower-income individuals. This income redistribution can lead to increased spending among lower-income households with a greater inclination towards consumption, and improve overall welfare outcomes.

Keywords

Consumption expenditure, Economic welfare, Governance, Tax Revenue

Article Details

How to Cite
ADENIKE , O. O., SHERIFFDEEN , A. T., & OLALEKAN , B. A. (2024). ESTIMATING ECONOMIC WELFARE IN SUB-SAHARAN AFRICA: THE IMPACT OF TAX POLICY AND GOVERNANCE. JOURNAL OF ECONOMICS AND ALLIED RESEARCH, 9(1), 52–64. Retrieved from https://jearecons.com/index.php/jearecons/article/view/371