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Fiscal Policy in Developing Countries: A Synoptic View

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Author Info
Raghbendra Jha ()

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Abstract

This paper presents a broad overview of fiscal issues confronting developing countries. Three of these are (i) developing countries have low tax/GDP and expenditure/GDP ratios compared to developed countries, even though developing countries need more public expenditure; (ii) developing country fiscal stance is often pro-cyclical; (iii) developing country tax resources are more volatile than those of developed countries. I also consider the issue of budgetary deficits and problems arising therefrom in developing countries. I then discuss some widely accepted norms for tax and expenditure reforms as also some issues of intergovernmental transfers in federal developing countries.

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Paper provided by Australian National University, Australia South Asia Research Centre in its series ASARC Working Papers with number 2007-01.

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Length: 39
Date of creation: 2007
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Handle: RePEc:pas:asarcc:2007-01

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Related research
Keywords: Fiscal Policy tax expenditure fiscal transfers

Find related papers by JEL classification:
H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management
H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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  1. Luis Catão & Marco Terrones, 2001. "Fiscal Deficits and Inflation: A New Look at the Emerging Market Evidence," IMF Working Papers 01/74, International Monetary Fund. [Downloadable!]
  2. Bird, Richard M. & Smart, Michael, 2002. "Intergovernmental Fiscal Transfers: International Lessons for Developing Countries," World Development, Elsevier, vol. 30(6), pages 899-912, June. [Downloadable!] (restricted)
  3. Sami Bibi & Jean-Yves Duclos, 2007. "Poverty-decreasing indirect tax reforms: Evidence from Tunisia," International Tax and Public Finance, Springer, vol. 14(2), pages 165-190, April. [Downloadable!] (restricted)
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  4. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April. [Downloadable!] (restricted)
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  5. Jonathan David Ostry & Enrique G. Mendoza, 2007. "International Evidence on Fiscal Solvency: Is Fiscal Policy "Responsible"?," IMF Working Papers 07/56, International Monetary Fund. [Downloadable!]
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  6. Boadway, Robin & Roberts, Sandra & Shah, Anwar, 1994. "Fiscal federalism : dimensions of tax reform in developing countries," Policy Research Working Paper Series 1385, The World Bank. [Downloadable!]
  7. J. Humberto Lopez & K. Schmidt-Hebbel & Luis Servén, 2000. "How Effective is Fiscal Policy in Raising National Saving?," The Review of Economics and Statistics, MIT Press, vol. 82(2), pages 226-238, May. [Downloadable!] (restricted)
  8. John Piggott & John Whalley, 2001. "VAT Base Broadening, Self Supply, and the Informal Sector," American Economic Review, American Economic Association, vol. 91(4), pages 1084-1094, September. [Downloadable!] (restricted)
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  9. Talvi, Ernesto & Vegh, Carlos A., 2005. "Tax base variability and procyclical fiscal policy in developing countries," Journal of Development Economics, Elsevier, vol. 78(1), pages 156-190, October. [Downloadable!] (restricted)
  10. Sah, Raaj Kumar, 1983. "How much redistribution is possible through commodity taxes?," Journal of Public Economics, Elsevier, vol. 20(1), pages 89-101, February. [Downloadable!] (restricted)
  11. Easterly, William & Schmidt-Hebbel, Klaus, 1993. "Fiscal Deficits and Macroeconomic Performance in Developing Countries," World Bank Research Observer, Oxford University Press, vol. 8(2), pages 211-37, July.
  12. Adam, Christopher S. & Bevan, David L., 2005. "Fiscal deficits and growth in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 571-597, April. [Downloadable!] (restricted)
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  13. Auriol, Emmanuelle & Warlters, Michael, 2005. "Taxation base in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 625-646, April. [Downloadable!] (restricted)
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