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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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    File URL: http://icepp.gsu.edu/files/2015/03/ispwp0802.pdf
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    References listed on IDEAS

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    Cited by:

    1. 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.
    2. 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.
    3. Belal Fallah, 2014. "The Pros and Cons of Formalizing Informal MSES in the Palestinian Economy," Working Papers 893, Economic Research Forum, revised Dec 2014.
    4. Ahmed, Vaqar & O'Donoghue, Cathal, 2009. "Redistributive effect of personal income taxation in Pakistan," MPRA Paper 16700, University Library of Munich, Germany.
    5. repec:taf:jdevst:v:52:y:2016:i:12:p:1704-1721 is not listed on IDEAS
    6. repec:asi:ajemod:2018:p:65-73 is not listed on IDEAS
    7. 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).
    8. 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.
    9. 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).
    10. 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.

    More about this item

    Keywords

    value-added tax; tax system; exit; voices;

    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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