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Developing Asia’s Fiscal Landscape and Challenges

Author

Listed:
  • Eugenia Go

    (World Bank)

  • Sam Hill

    (World Bank)

  • Maria Hanna Jaber

    (Asian Development Bank)

  • Yothin Jinjarak

    (Asian Development Bank)

  • Donghyun Park

    (Asian Development Bank)

  • Anton Ragos

    (Asian Development Bank)

Abstract

What are the salient features of developing Asia’s tax revenues and public expenditures? How do these compare with other economies and how have they been affected by the coronavirus disease (COVID-19) pandemic? To analyze these issues we assemble data across economies drawing on a range of sources to maximize temporal and coverage of economies. We find that while tax revenues in developing Asia steadily rose in the 2 decades before COVID-19, they continued to lag behind high-income economies and some developing peers. The region relies on indirect taxes, particularly consumption taxes, creating a relatively efficient but less progressive tax structure. Alongside these lower tax revenues, government expenditures on education and health were comparatively modest. Substantial fiscal policy stimulus in response to COVID-19 comprised both tax and expenditure measures which, combined with the impact of the downturn on revenues, has severely weakened public finances in many developing Asian economies.

Suggested Citation

  • Eugenia Go & Sam Hill & Maria Hanna Jaber & Yothin Jinjarak & Donghyun Park & Anton Ragos, 2022. "Developing Asia’s Fiscal Landscape and Challenges," ADB Economics Working Paper Series 665, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0665
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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