not improve if the sample is restricted to the eight main commodity
exporters (bottom-left panel), but improves (0.39 for 1990-2007,
0.63 for 2003-07) when considering the impact of terms of trade
changes on non-tax revenue for these countries between 2003 and
- Overall, there is only limited evidence that gains in
international terms of trade raised tax/GDP ratios. The impact on
income inequality (which could derive from the distribution of a
greater amount of rents via the budget) does not seem strong. In
addition, the impact of such redistribution is not automatic, as it
depends on the incidence of transfers carried out with the
additional revenue. In contrast, it is likely (see Figure 4) that the
main distributive effect of terms of trade takes place via the increase
in GDP growth.
Figure 2 (A, B, C, D). Average international terms of trade and tax
revenue/GDP ratio, Latin America, 1990- 07
15171921232580901001101201990 1992 1994 1996 1998 2000 2002 2004 2006A. Average International Terms of Trade of L.A. (left scale,
blue line) vs. Average Regional Total Revenue/GDP ratio
(right scale, red line), 1990- 2007r=0.97 (0.98 for 2003-7)tot Tota l Revenu e/GDP