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Subnational Taxation in Large Emerging Countries: BRIC Plus One


  • Richard M. Bird

    (Institute on Municipal Finance and Governance, University of Toronto)


This paper reviews the evolution and current state of subnational taxation in five large emerging countries: Brazil, Russia, India, China, and Nigeria—BRIC plus one. As these case studies show, intergovernmental fiscal relations in any country are inevitably both path-dependent and context-sensitive. In India and Brazil, for example, subnational governments already have a significant degree of fiscal autonomy in being able to set some key tax rates. In both countries, however, substantial attention still must be paid to improving the general consumption taxes that are the main source of regional government revenues as well as the property taxes on which local governments mainly depend. Although Nigeria, like India and Brazil, is a federation, its fiscal system depends so heavily on oil revenues that almost all political attention has been focused on securing a bigger share of these revenues. Both China and Russia have made important changes in the direction of centralizing rather than decentralizing effective control over subnational taxes. In both countries, the key issue is the extent to which fiscal decentralization is to be accompanied by significant political decentralization. At present, in neither China nor Russia is it clear that the central authorities are willing to permit subnational governments much autonomy in this respect.

Suggested Citation

  • Richard M. Bird, 2012. "Subnational Taxation in Large Emerging Countries: BRIC Plus One," IMFG Papers 06, University of Toronto, Institute on Municipal Finance and Governance.
  • Handle: RePEc:mfg:wpaper:06

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    References listed on IDEAS

    1. Roy Bahl & Eunice Heredia-Ortiz & Jorge Martinez-Vazquez & Mark Rider, 2005. "India: Fiscal Condition of the States, International Experience,and Options for Reform: Volume 1 (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper05141, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    2. Chun-Yan Kuo & Thomas Mcgirr & Satya Poddar, 1988. "Measuring the Non-Neutralities of Sales and Excise Taxes in Canada," Development Discussion Papers 1988-08, JDI Executive Programs.
    3. Afonso, José Roberto Rodrigues & Serra, José, 2007. "Fiscal federalism in Brazil: an overview," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    4. Richard M. Bird & Enid Slack (ed.), 2004. "International Handbook of Land and Property Taxation," Books, Edward Elgar Publishing, number 3304.
    5. Facchini, Giovanni & Testa, Cecilia, 2008. "Fiscal decentralization, regional inequality and bail-outs: Lessons from Brazil's debt crisis," The Quarterly Review of Economics and Finance, Elsevier, vol. 48(2), pages 333-344, May.
    6. Migara O. De Silva & Galina Kurlyandskaya & Elena Andreeva & Natalia Golovanova, 2009. "Intergovernmental Reforms in the Russian Federation : One Step Forward, Two Steps Back?," World Bank Publications, The World Bank, number 2668, June.
    7. Jorge Martinez-Vazquez, 2007. "Asymmetric Federalism in Russia: Cure or Poison?," Chapters,in: Fiscal Fragmentation in Decentralized Countries, chapter 8 Edward Elgar Publishing.
    8. Hansjörg Blöchliger & David King, 2006. "Fiscal Autonomy of Sub-Central Governments," OECD Working Papers on Fiscal Federalism 2, OECD Publishing.
    9. Áureo de Paula & Jose A. Scheinkman, 2010. "Value-Added Taxes, Chain Effects, and Informality," American Economic Journal: Macroeconomics, American Economic Association, vol. 2(4), pages 195-221, October.
    10. Jorge Martinez-Vasquez & Jameson Boex, 2001. "Russia's Transition to a New Federalism," World Bank Publications, The World Bank, number 15248, June.
    11. Ebel, Robert D. & Yilmaz, Serdar, 2002. "On the measurement and impact of fiscal decentralization," Policy Research Working Paper Series 2809, The World Bank.
    12. Jorge Martinez-Vazquez & Mark Rider & Sally Wallace, 2008. "Tax Reform in Russia," Books, Edward Elgar Publishing, number 2368.
    13. Richard M. Bird & Robert D. Ebel, 2005. "Subsidiarity, Solidarity, and Asymmetry," International Tax Program Papers 0509, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
    14. Richard M. Bird & Sally Wallace, 2003. "Is It Really so Hard to Tax the Hard-to-Tax? The Context and Role of Presumptive Taxes," International Tax Program Papers 0307, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
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    Cited by:

    1. Ignacio Lozano & María Adelaida Martínez, 2013. "Enrollment and Quality Levels of Colombia's Public Basic Education: Has Fiscal Decentralization Improved Them?," BORRADORES DE ECONOMIA 010387, BANCO DE LA REPÚBLICA.
    2. Ekor, Maxwell & Adeniyi, Oluwatosin & Saka, Jimoh, 2015. "Trade Intensity Analysis of South Africa-BRIC Economic Relations," MPRA Paper 82632, University Library of Munich, Germany.
    3. Richard M. Bird, 2008. "Tax Assignment Revisited," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0805, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    More about this item


    state and local taxation; intergovernmental fiscal relations; Brazil; Russia; India; China; Nigeria;

    JEL classification:

    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • P35 - Economic Systems - - Socialist Institutions and Their Transitions - - - Public Finance
    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance

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