Impact Of Oil Rents On Non-Resource Tax Revenue: The Moderating Role Of Economic Institutions In Selected Ecowas Member Countries

Abstract

This study examines the impact of oil rents on non-resource tax revenue in selected ECOWAS countries (Nigeria, Ghana, Côte d'Ivoire, Benin, and Niger) over the period 1990–2024, with emphasis on the moderating role of economic institutional quality. Using panel data and applying Panel-Corrected Standard Errors (PCSE) alongside Dynamic Common Correlated Effects (DCCE) for robustness, the findings reveal that oil rents exert a negative and significant effect on non-resource tax revenue, confirming the presence of a fiscal resource curse in the region. Institutional quality, however, shows a positive effect on tax revenue. The interaction term between oil rents and institutional quality is positive and significant in the PCSE model but becomes insignificant under the DCCE robustness check, indicating that the moderating role of institutions is not entirely robust when crosssectional dependence and dynamic effects are considered. The results further indicate that weak institutional frameworks contribute to low domestic revenue mobilization, while stronger institutions enhance tax performance. The study concludes that improving governance, transparency, and accountability is critical for ensuring that oil revenues complement rather than substitute non-resource tax efforts. Policy recommendations emphasize strengthening institutional capacity, diversifying economic activities, and promoting fiscal stability for sustainable revenue generation in ECOWAS countries.