This study examines how mandatory electronic fiscal devices (EFDs) impact firm behavior in sub-Saharan Africa. Using a harmonized dataset of 12,450 firm-year observations across 10 economies, we analyze the tension between deterministic surveillance and economic growth. Utilizing a triple difference (DDD) strategy and density-discontinuity analysis, we evaluate how digital mandates induce strategic informality and digital dwarfism. We find that while EFDs enhance monitoring, they trigger strategic informality and digital dwarfism, where firms artificially suppress turnover to remain below surveillance thresholds. This structural squeeze results in a -12.4% informality leakage and a 61.2% collapse in SME graduation rates. In low-trust

environments, digital mandates erode the fiscal social contract, leading to a net shrinkage of the formal tax base. We identify a 74.4% drop in firm density immediately above the mandate threshold, signaling a productivity ceiling that traps SMEs in the shadow economy.

Can simply exceeding a critical tax-to-GDP threshold bring about an accelerated trajectory of economic growth and development in a country? We revisit Gaspar, Jaramillo and Wingender’s 2016 “tax tipping point” result. Both with their regression discontinuity approach and a dynamic difference-in-differences estimation, we find that cumulative growth over 10 years increases by 10 percentage points when a country’s tax-to-GDP ratio increases above a 10 percent threshold. Further, crossing the threshold coincides with the beginning of significant improvements in measures of a country’s financial development, government effectiveness, legal framework, and governance. Event studies additionally reveal that only transformational episodes of tax increases above the threshold deliver these gains: episodic crossings that fail to bring tax revenues durably above the threshold yield fleeting gains. Our results suggest that a minimal tax capacity is necessary for growth but emphasize that only a sustained tax increase associated with other developmental progress is sufficient.

There is an ongoing debate on whether the transfer pricing (TP) standards introduced under the OECD/G20 BEPS Project are suitable for lower‑income countries (LICs). Although more than 100 LICs have adopted BEPS‑aligned documentation requirements, the revenue effects remain unclear. This paper uses new country‑level data for 97 LICs from 2011–2020 and exploits the staggered adoption of BEPS Action 13 to estimate its impact on corporate income tax (CIT) revenue. To capture institutional heterogeneity, countries are grouped by the sophistication of their TP frameworks prior to adoption. The results reveal striking differences across groups. Countries with limited TP rules experience significant and sustained increases in CIT revenue—up to 0.86 percentage points of GDP three years after adoption. In contrast, countries with moderate TP sophistication show small or negative effects, while those with comprehensive frameworks exhibit no discernible change. These findings highlight that the effectiveness of BEPS TP documentation critically depends on countries’ institutional starting points.

This paper analyzes Brazil’s 2016 offshore tax amnesty, implemented ahead of the increase in monitoring capacity under the OECD Common Reporting Standard. Using administrative microdata on the universe of reported foreign assets, we find that 21,000 individuals disclosed $59 billion (3.4% of GDP). Participation was strongly correlated with wealth, reaching 21% among the top 0.001%. However, using microdata on foreign exchange, we show that net capital repatriation was limited, averaging only 20% of disclosed assets. Most wealth remained abroad, driven by high foreign returns and diversification benefits. Tracking repatriated capital, we find it flowed mainly into domestic fixed income rather than the real economy. Consequently, firms owned by amnesty participants showed no growth in employment or revenues, although they significantly substituted external debt with proprietary capital. These results suggest that while amnesties effectively uncover hidden wealth, they are insufficient to fundamentally shift capital allocation.