Fiscal potential: a systematic review of the literature

Abstract

The main objective of this article is to provide an in-depth analysis of tax potential as a central concept in public finance. It serves as a fundamental conceptual framework for understanding a jurisdiction’s theoretical capacity to mobilize tax revenues, regardless of policy choices, taxpayer behavior, or the specific methods of tax collection.

This concept has attracted growing attention in the economic and financial literature, particularly in studies on decentralization, fiscal equalization, and the allocation of public resources. However, despite its frequent use, fiscal potential remains a concept with sometimes blurred boundaries, characterized by a variety of definitions and interpretations depending on institutional contexts and the theoretical approaches adopted. This conceptual heterogeneity underscores the need for clarification and synthesis.

With this in mind, our study is based on a systematic literature review aimed at clarifying the conceptual foundations of tax potential and situating it in relation to related concepts in public finance, conducted in accordance with the PRISMA statement guidelines. Three scientific databases were used to identify relevant publications, and rigorous inclusion and exclusion criteria were applied to ensure the quality and relevance of the selected studies. From an initial corpus of 200 scientific articles published between 2000 and 2025, identified in three databases—namely Scopus, Web of Science, and ScienceDirect—a methodical and transparent screening process, based on the inclusion and exclusion criteria, resulted in the selection of 12 studies for the final analysis. The articles were screened using the Rayyan tool, following a methodical and transparent process. Analysis of this corpus revealed a typology of definitional approaches to tax potential as well as its main components, thereby making a concrete contribution to clarifying this concept.

JEL Classification: E62

Paper type: Theoretical research