Advanced Search
MyIDEAS: Login to save this paper or follow this series

An Alternative View of Tax Incidence Analysis for Developing Countries

Contents:

Author Info

  • Anwar Shah
  • John Whalley

Abstract

This paper revisits the long-standing issue of the incidence of taxes in developing countries. Its central theme is that despite many decades of studies, tax incidence analyses for developing countries continue to be based upon the same shifting assumptions used in developed country studies, despite some obvious pitfalls. Taxes are assumed to be shifted forward to consumers, or backwards onto factor incomes, as has been the case for developed country tax incidence work from Bowley and Stamp to Peclunan and Okner. Developing countries typically have a much different non-tax policy and regulatory environment from developed countries, with higher protection, rationed foreign exchange, price controls, black markets, credit rationing and many other features. The paper argues that all these features can greatly complicate and even obscure the incidence effects of taxes in developing countries. For several taxes, taking such features into account can reverse signs and/or substantially revise estimates of incidence effects from conventional thinking and by substantial orders of magnitude. A final section sets out some implications for country lending programs, both by type of country and level of development, and comments on how the extent to which non-tax policy reform has already been implemented affects the significance of the points raised here.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.nber.org/papers/w3375.pdf
Download Restriction: no

Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 3375.

as in new window
Length:
Date of creation: Jun 1990
Date of revision:
Publication status: published as World Bank Economic Review, vol. 5, no. 3, September 1991
Handle: RePEc:nbr:nberwo:3375

Note: ITI PE IFM
Contact details of provider:
Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.
Phone: 617-868-3900
Email:
Web page: http://www.nber.org
More information through EDIRC

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Chaudry-Shah, Anwar, 1988. " Capitalization and the Theory of Local Public Finance: An Interpretive Essay," Journal of Economic Surveys, Wiley Blackwell, vol. 2(3), pages 209-43.
  2. Muhammad Hussain Malik & Najam Us Saqib, 1989. "Tax Incidence by Income Classes in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(1), pages 13-26.
  3. Davies, James B & St-Hilaire, France & Whalley, John, 1984. "Some Calculations of Lifetime Tax Incidence," American Economic Review, American Economic Association, vol. 74(4), pages 633-49, September.
  4. Shoven, John B & Whalley, John, 1984. "Applied General-Equilibrium Models of Taxation and International Trade: An Introduction and Survey," Journal of Economic Literature, American Economic Association, vol. 22(3), pages 1007-51, September.
  5. Bovenberg, A.L., 1987. "Indirect taxation in developing countries: A general equilibrium approach," Open Access publications from Tilburg University urn:nbn:nl:ui:12-152947, Tilburg University.
  6. Piggott, John & Whalley, John, 1987. "Interpreting Net Fiscal Incidence Calculations," The Review of Economics and Statistics, MIT Press, vol. 69(4), pages 685-94, November.
  7. McLure, Charles E, Jr & Thirsk, Wayne R, 1978. "The Inequity of Taxing Iniquity: A Plea for Reduced Sumptuary Taxes in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 26(3), pages 487-503, April.
  8. Ahmad, Ehtisham & Stern, Nicholas, 1990. "Tax Reform and Shadow Prices for Pakistan," Oxford Economic Papers, Oxford University Press, vol. 42(1), pages 135-59, January.
  9. Anwar M. Chaudry-Shah, 1989. "A Capitalization Approach to Fiscal Incidence at the Local Level," Land Economics, University of Wisconsin Press, vol. 65(4), pages 359-375.
  10. Shoven,John B. & Whalley,John, 1992. "Applying General Equilibrium," Cambridge Books, Cambridge University Press, number 9780521266550, April.
  11. Meerman, Jacob, 1980. "The Incidence of Sales and Excise Taxes, or Where Do We Put the Transfers?," Journal of Political Economy, University of Chicago Press, vol. 88(6), pages 1242-48, December.
  12. Imam, Hasan & Whalley, John, 1982. "General equilibrium with price intervention policies: a computational approach," Journal of Public Economics, Elsevier, vol. 18(1), pages 105-119, June.
  13. John Whalley, 1989. "Recent Trade Liberalization in the Developing World: What is Behind It, and Where is it Headed?," NBER Working Papers 3057, National Bureau of Economic Research, Inc.
  14. St-Hilaire, France & Whalley, John, 1983. "A Microconsistent Equilibrium Data Set for Canada for Use in Tax Policy Analysis," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 29(2), pages 175-204, June.
  15. Ahmad, Ehtisham & Ludlow, Stephen, 1989. "The distributional consequences of a tax reform on a VAT for Pakistan," Policy Research Working Paper Series 238, The World Bank.
  16. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-42, March.
  17. Mohammad, Sharif & Whalley, John, 1985. "Controls and the Intersectoral Terms of Trade: The Indian Case," Economic Journal, Royal Economic Society, vol. 95(379), pages 759-66, September.
  18. Clarete, Ramon L. & Whalley, John, 1988. "Interactions between trade policies and domestic distortions in a small open developing country," Journal of International Economics, Elsevier, vol. 24(3-4), pages 345-358, May.
  19. Browning, Edgar K, 1978. "The Burden of Taxation," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 649-71, August.
  20. Charles L. Ballard & Don Fullerton & John B. Shoven & John Whalley, 1985. "General Equilibrium Analysis of Tax Policies," NBER Chapters, in: A General Equilibrium Model for Tax Policy Evaluation, pages 6-24 National Bureau of Economic Research, Inc.
  21. Bird, Richard M & Miller, Barbara Diane, 1989. "The Incidence of Indirect Taxes on Low-Income Households in Jamaica," Economic Development and Cultural Change, University of Chicago Press, vol. 37(2), pages 393-409, January.
  22. John Whalley, 1984. "Regression or Progression: The Taxing Question of Incidence Analysis," Canadian Journal of Economics, Canadian Economics Association, vol. 17(4), pages 654-82, November.
  23. Auerbach, Alan, 1990. "The cost of capital and investment in developing countries," Policy Research Working Paper Series 410, The World Bank.
  24. Ziderman, Adrian, 1989. "Payroll taxes for financing training in developing countries," Policy Research Working Paper Series 141, The World Bank.
  25. Heady, Christopher, 1987. "Designing Taxes with Migration," Economic Journal, Royal Economic Society, vol. 97(388a), pages 87-98, Supplemen.
  26. Imam, M Hasan & Whalley, John, 1985. "Incidence Analysis of a Sector-specific Minimum Wage in a Two-Sector Harris-Todaro Model," The Quarterly Journal of Economics, MIT Press, vol. 100(1), pages 207-24, February.
  27. Bird, Richard M., 1987. "A new look at indirect taxation in developing countries," World Development, Elsevier, vol. 15(9), pages 1151-1161, September.
  28. Nguyen, Trien T. & Whalley, John, 1986. "Equilibrium under price controls with endogenous transactions costs," Journal of Economic Theory, Elsevier, vol. 39(2), pages 290-300, August.
  29. McLure, Charles Jr., 1977. "Taxation and the urban poor in developing countries," World Development, Elsevier, vol. 5(3), pages 169-188, March.
  30. Mohammad, Sharif & Whalley, John, 1984. "Rent Seeking in India: Its Costs and Policy Significance," Kyklos, Wiley Blackwell, vol. 37(3), pages 387-413.
  31. Nair, Govindan & Filippides, Anastasio, 1988. "How much do state-owned public enterprises contribute to public sector deficits in developing countries - and why?," Policy Research Working Paper Series 45, The World Bank.
  32. Pinto, Brian, 1988. "Black market premia, exchange rate unification, and inflation in sub-Saharan Africa," Policy Research Working Paper Series 37, The World Bank.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Renelt, David, 1991. "Economic growth : a review of the theoretical and empirical literature," Policy Research Working Paper Series 678, The World Bank.
  2. Levine, Ross & Renelt, David, 1991. "Cross-country studies of growth and policy : methodological, conceptual, and statistical problems," Policy Research Working Paper Series 608, The World Bank.
  3. World Bank, 2000. "Thailand : Public Finance Review," World Bank Other Operational Studies 14508, The World Bank.
  4. Sennoga, Edward B. & Matovu, John Mary & Twimukye, Evarist P., 2009. "Tax evasion and widening the tax base in Uganda," Research Series 54802, Economic Policy Research Centre (EPRC).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3375. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.