Why kill the golden goose? A political-economy model of export taxation

Why do governments tax exports at rates that are ultimately self-defeating? An answer may lie in the time-inconsistent nature of a tow-tax policy. Usi ng a dynamic model of export taxation, I show that the sustainability of a low-tax policy depends on three variables: the ratio of sunk costs to total costs, how heavily future export revenue is discounted, and expected futur e export earnings. Using data on taxation, leadership duration, and profita bility, I test this theory for 32 countries and six crops from Sub-Saharan Africa. These three variables are statistically and economically relevant p redictors of tax regime.