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Political Economy of Multi-Level Tax Assignments in Latin American Countries; Earmarked Revenue Versus Tax Autonomy


  • Giorgio Brosio
  • Ehtisham Ahmad


A weakness of decentralization and overall tax reforms in Latin America is the lack of attention to adequate taxation at the subnational government. A reliance on shared taxes with extensive earmarking leads to weak subnational accountability and soft budget constraints. The paper explores the options for expanding subnational taxation in Latin America. A range of subnational tax instruments might be considered, but interactions between new tax assignments and the system of transfers is important from a political economy perspective.

Suggested Citation

  • Giorgio Brosio & Ehtisham Ahmad, 2008. "Political Economy of Multi-Level Tax Assignments in Latin American Countries; Earmarked Revenue Versus Tax Autonomy," IMF Working Papers 08/71, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:08/71

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    References listed on IDEAS

    1. Faguet, Jean-Paul & Sánchez, Fabio, 2008. "Decentralization's Effects on Educational Outcomes in Bolivia and Colombia," World Development, Elsevier, vol. 36(7), pages 1294-1316, July.
    2. Maria Flavia Ambrosiano & Massimo Bordignon, 2006. "Normative Versus Positive Theories of Revenue Assignments in Federations," Chapters,in: Handbook of Fiscal Federalism, chapter 12 Edward Elgar Publishing.
    3. Olga Lucia Acosta & Richard M. Bird, 2003. "The Dilemma of Decentralization in Colombia," International Tax Program Papers 0404, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
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    Cited by:

    1. Matteo Bobba & Jérémie Gignoux, 2011. "Policy-induced Social Interactions and Schooling Decisions," PSE - G-MOND WORKING PAPERS halshs-00962478, HAL.
    2. Andrea Bonilla Bolanos, 2014. "External Vulnerabilities And Economic Integration: Is The Union Of South American Nations A Promising Project?," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 39(2), pages 97-131, June.
    3. Karelys Guzmán-Finol & Ana María Estrada-Jabela, 2016. "Los gobiernos departamentales y la inversión de regalías en Colombia: Un análisis descriptivo, 2012 - 2015," REVISTA ECONOMÍA & REGIÓN, UNIVERSIDAD TECNOLÓGICA DE BOLÍVAR, vol. 10(1), pages 119-163, June.
    4. Daniel Artana & Sebastián Auguste & Marcela Cristini & Cynthia Moskovits & Ivana Templado, 2012. "Sub-National Revenue Mobilization in Latin American and Caribbean Countries: The Case of Argentina," IDB Publications (Working Papers) 3887, Inter-American Development Bank.
    5. Paul Smoke, 2014. "Why theory and practice are different: The gap between principles and reality in subnational revenue systems," Chapters,in: Taxation and Development: The Weakest Link?, chapter 9, pages 287-325 Edward Elgar Publishing.
    6. Gustavo Canavire-Bacarreza & Jorge Martinez-Vazquez & Cristian Sepúlveda, 2012. "Sub-national Revenue Mobilization in Peru," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1209, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Jonas Frank, 2010. "Towards a Fiscal Pact : The Political Economy of Decentralization in Bolivia," World Bank Other Operational Studies 12737, The World Bank.

    More about this item


    Intergovernmental fiscal relations; Latin America; Tax reforms; taxation; property tax; tax administration; tax collections;

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