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Tax Challenges Facing Developing Countries

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  • Richard Bird

    (University of Toronto)

Abstract

Taxes matter. We all know we need them to pay for public services. But most of us complain about them -- exercise our "voice" -- and often try to dodge them -- to "exit" -- when we can. Those who design and implement tax systems, like those who try to escape them, for the most part consider themselves to be eminently ‘practical’ people responding to the world around them as they see it. As John Maynard Keynes (1936, 384-85) once said, however, “practical men, who believe themselves to be quite free from any intellectual influences, are usually the slaves of some defunct economist…..soon or late, it is ideas, not vested interests, which are dangerous for good or evil.” While true to some extent, at least when it comes to taxes this dictum both unduly flatters economists and puts too little weight on interests and other factors. Tax policy everywhere is shaped not only by ideas and vested interests but also by changing economic conditions, administrative constraints and technological possibilities, and, especially, the political institutions within which these factors are at play.

Suggested Citation

  • Richard Bird, 2008. "Tax Challenges Facing Developing Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0802, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  • Handle: RePEc:ays:ispwps:paper0802
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    Cited by:

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    2. Richard M. Bird, 2008. "The BBLR Approach to tax Reform in Emerging Countries," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0804, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Sokolovskyi, Dmytro, 2018. "Factors for the formation of inefficient states when using tax incentive regimes," MPRA Paper 89141, University Library of Munich, Germany.
    4. Belal Fallah, 2014. "The Pros and Cons of Formalizing Informal MSES in the Palestinian Economy," Working Papers 893, Economic Research Forum, revised Dec 2014.
    5. Ahmed, Vaqar & O'Donoghue, Cathal, 2009. "Redistributive effect of personal income taxation in Pakistan," MPRA Paper 16700, University Library of Munich, Germany.
    6. Mirza Hassan & Wilson Prichard, 2016. "The Political Economy of Domestic Tax Reform in Bangladesh: Political Settlements, Informal Institutions and the Negotiation of Reform," Journal of Development Studies, Taylor & Francis Journals, vol. 52(12), pages 1704-1721, December.
    7. Olusegun Ayodele Akanbi, 2019. "State Institutions and Tax Capacity: An Empirical Investigation of Causality," IMF Working Papers 2019/177, International Monetary Fund.
    8. Mohammed Abdullahi Umar & Chek Derashid & Idawati Ibrahim, 2017. "What Is Wrong With the Fiscal Social Contract of Taxation in Developing Countries? A Dialogue With Self-Employed Business Owners in Nigeria," SAGE Open, , vol. 7(4), pages 21582440177, December.
    9. Temitope J. Laniran, 2017. "Fiscal regimes in resource dependent African states: a political economy game," Working Papers of the African Governance and Development Institute. 17/037, African Governance and Development Institute..
    10. Azka Amin & Yan Chen & Shaoan Huang, 2018. "Personal Income Tax and Economic Growth: A Comparative Study Between China and Pakistan," Asian Journal of Economic Modelling, Asian Economic and Social Society, vol. 6(1), pages 65-73, March.
    11. Imam Patrick Amir & Jacobs Davina, 2014. "Effect of Corruption on Tax Revenues in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 10(1), pages 1-24, April.
    12. Odd-Helge Fjeldstad, 2013. "Taxation and Development: a Review of Donor Support to Strengthen Tax Systems in Developing Countries," WIDER Working Paper Series wp-2013-010, World Institute for Development Economic Research (UNU-WIDER).
    13. Hassan, Mirza & Prichard, Wilson, 2016. "The Political Economy of Domestic Tax Reform in Bangladesh: Political Settlements, Informal Institutions and the Negotiation of Reform," Working Papers 13681, Institute of Development Studies, International Centre for Tax and Development.
    14. Ahrens, Joachim & Schweickert, Rainer & Zenker, Juliane, 2011. "Varieties of capitalism, governance and government spending: A cross-section analysis," Kiel Working Papers 1726, Kiel Institute for the World Economy (IfW).
    15. Georgia Kaplanoglou & Vassilis T. Rapanos, 2011. "The Greek Fiscal Crisis and the Role of Fiscal Governance," GreeSE – Hellenic Observatory Papers on Greece and Southeast Europe 48, Hellenic Observatory, LSE.
    16. Fjeldstad, Odd-Helge, 2013. "Taxation and Development : A Review of Donor Support to Strengthen Tax Systems in Developing Countries," WIDER Working Paper Series 010, World Institute for Development Economic Research (UNU-WIDER).
    17. Temitope J. Laniran, 2017. "Fiscal regimes in resource dependent African states: a political economy game," Research Africa Network Working Papers 17/037, Research Africa Network (RAN).
    18. Fjeldstad, Odd†Helge, 2014. "Taxation and Development: a Review of Donor Support to Strengthen Tax Systems in Developing Countries," Working Papers 13711, Institute of Development Studies, International Centre for Tax and Development.
    19. Joachim Ahrens & Rainer Schweickert & Juliane Zenker, 2015. "Varieties Of Capitalism And Government Spending In Developed And Developing Countries," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 40(1), pages 113-136, March.

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    More about this item

    Keywords

    value-added tax; tax system; exit; voices;
    All these keywords.

    JEL classification:

    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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