This article explores the fiscal effects of aid in Ethiopia using the Cointegrated Vector Auto-Regressive (CVAR) methodology to model complex long-run and short-run dynamics. We use national data for 1961–2010, including a measure of aid capturing flows through the budget as measured by the recipient. The data suggests three main conclusions on the long-run equilibrium….
Read moreTax experiments have been gaining momentum in recent years, although this literature dates back several decades. With new developments in methods and data availability, tax experiments have gradually moved away from lab settings and towards the field. This movement from the lab to the field has happened against the background of the ‘credibility revolution’ in…
Read moreThis article provides a ground-level view of market taxation in two local government areas in Ghana’s relatively disadvantaged northern region. It describes a system shaped by informal practices that are grounded in social relationships and collective norms, which sometimes foster greater equity and in other cases serve to reinforce existing inequalities. The evidence suggests the…
Read moreStructural power is a critical variable that merits more extensive and more explicit attention in Latin American political economy and in comparative politics more broadly. Assessing structural power in conjunction with its counterpart, instrumental power, can provide strong leverage for explaining variation in policy outcomes that affect business interests. However, structural power must be carefully…
Read moreThis paper considers the merits of a price-based royalty, a royalty for which the rate varies with the product price, as a fiscal instrument for taxing extractive industries. In light of the literature on natural resources taxation, the case for a price-based royalty is appealing. A price-based royalty captures some of the desirable attributes of…
Read moreAt the level of tax design, the answer to this question is clear and positive. It would be easy, for example, to draft the international treaty and the national legislation required to implement Thomas Piketty’s (2014) proposal for a global tax on wealth. The obstacles to acceptance and implementation of those proposals are merely political…
Read moreThis paper addresses vulnerability of revenue to external shocks using export composition to capture economic structure and differentiating countries according to income levels, resource endowments and political regimes. This gives a richer characterisation than previous studies. Lower income countries are vulnerable to shocks, especially in terms of trade (associated with the greatest revenue loss): democratic…
Read moreThis paper explains the persistence of a tax system characterised by low revenue collection and extensive informality in Bangladesh. It combines analysis of long-term formal and informal institutions and of micro-level incentives shaping negotiation of short-term reform. The system is unusually informal, discretionary, and corrupt, but remains resistant to change because it delivers low and…
Read moreThis research interrogates the factors underpinning the relative success of a property tax reform programme in Sierra Leone. Recognising the importance of politics in shaping reform outcomes, it highlights reform strategies that have contributed to overcoming both technical and political barriers to reform. It highlights three interconnected arguments. First, there is a need for long-term,…
Read moreThe relation between aid and taxation is largely contested in the literature. On the one hand, aid may act as a substitute for tax revenue and thus have a crowding-out effect. It can also have a detrimental effect on domestic tax institutions. On the other hand, it can promote and support tax mobilisation through policy…
Read moreThe latest issue of the Journal of Development Studies includes a special section on the politics of taxation, with several articles by ICTD researchers. The Politics of Taxation: Introduction to the Special Section (Paywall) Christian von Haldenwang & Armin von Schiller Domestic revenue mobilisation has received growing attention in recent years. International players such as the Organisation…
Read moreThe idea that states seek to maximise their revenue collection has occupied a significant place in contemporary political economy analysis of taxation, and has helped us understand the history of state formation. It is, however, very much at variance with the daily experience of tax policy and practice. Governments are frequently revenue-sacrificers: they fail to…
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