Journal of Tax Research

Abstract

The Compliance of government’s expenditures with its tax revenues is the most important criteria for evaluating the performance of governments in political economy and public sector. Globalization causes governments to lose their monopoly on its implementation of fiscal policies. This study investigates the role of globalization, Oil revenues and economic growth on the ratio of the government’s tax revenues to its expenditures (T/G index) regarding Iran's economy between 1970 and 2014, using autoregressive distributed lag (ARDL) method. According to the results, Globalization had a short term positive impact and a long term negative impact on the T/G index. So in the short term Globalization’s “efficiency hypothesis” and in the long term Globalization’s “compensation hypothesis” are true for the Iran’s economy.