The Proliferation of Fiscal Incentives and the Nicaraguan State as a Manager of Rents: A Political Economy Perspective on Nicaraguan Industrial Policy Since 1990
AbstractThis paper finds that the proliferation of fiscal incentives in the form of tax exemptions in Nicaragua since 1990 represents the indiscriminate allocation of monopoly rents to interest groups. While theory suggests some rents can encourage productive investments, Nicaragua’s tax incentives are merely “assistentialist” and lack effectiveness. For a dynamic industrial policy, opportunity costs would need to be taken into account and rents would need to be performance contingent, which requires selectivity and increased transparency.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 2335.
Date of creation: 07 Nov 2006
Date of revision:
Nicaragua; industrial policy; political economy; fiscal incentives; tax incentives; monopoly rents; rent-seeking;
Find related papers by JEL classification:
- P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
- H32 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Firm
- L5 - Industrial Organization - - Regulation and Industrial Policy
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