This paper challenges a long-held development-policy assumption that aid flow in world’s poorer countries is caused by lack of domestic
resources. It uses comparative data for five African countries (Burundi, Kenya, Rwanda, Tanzania, and Uganda) to examine the relationship
between growth in public debt and tax revenue. Second, it exploits the timing of political events in a within-country setting to identify the
changes in government spending, public debt and tax revenue associated with (discrete changes in) political event. The results based on the
first-differences estimation method show a negative relationship between growth of public debt and tax to GDP ratio. The positive association
between growth in government spending/debt and political events suggests that domestic politics and resource mobilisation are somehow
entangled. Preference for aid is to a large extent influenced by politically driven interests, but also as the principal factors shaping policy
attitudes toward domestic resources, corruption and tax evasion. Conversely, while some empirical support is found for economic and
institutional factors such as the structure of the economy and administration capacity, as predictor of revenue growth, the institutional
predictors are weaker overall than the political interest predictors.