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The Role of the Property Tax in Financing Rural Local Governments in Developing Countries

Author

Listed:
  • Richard M. Bird
  • Enid Slack

    () (International Tax Program, Rotman School of Management, University of Toronto)

Abstract

We argue in this paper that better rural local governments are needed to improve the lives of billions and that a good property tax is the key to improving rural local governments. Moreover, we suggest that only by giving local governments both the incentive and the ability to levy a property tax can effective rural local government and a meaningful rural property tax be achieved in most countries. Such a tax would often likely be a simple area-based levy, and the central government may not be too happy either with the way communities run the tax or how they spend the proceeds, but the critical role of the central government is to support and facilitate local action on this front, not to supplant it.

Suggested Citation

  • Richard M. Bird & Enid Slack, 2006. "The Role of the Property Tax in Financing Rural Local Governments in Developing Countries," International Tax Program Papers 0608, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
  • Handle: RePEc:ttp:itpwps:0608
    as

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    File URL: http://www-2.rotman.utoronto.ca/iib/ITP0608.pdf
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    References listed on IDEAS

    as
    1. Roy Bahl & Jorge Martinez-Vazquez, 2013. "Sequencing Fiscal Decentralization," Annals of Economics and Finance, Society for AEF, vol. 14(2), pages 641-687, November.
    2. Skinner, Jonathan, 1991. "Prospects for Agricultural Land Taxation in Developing Countries," World Bank Economic Review, World Bank Group, vol. 5(3), pages 493-511, September.
    3. Faguet, Jean-Paul, 2004. "Does decentralization increase government responsiveness to local needs?: Evidence from Bolivia," Journal of Public Economics, Elsevier, vol. 88(3-4), pages 867-893, March.
    4. Khan, Mahmood Hasan, 2001. "Agricultural taxation in developing countries: a survey of issues and policy," Agricultural Economics, Blackwell, vol. 24(3), pages 315-328, March.
    5. Richard M. Bird & Fran├žois Vaillancourt, 2006. "Perspectives on Fiscal Federalism," World Bank Publications, The World Bank, number 6953.
    6. Roy Bahl, 1999. "Implementation Rules For Fiscal Decentralization," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper9901, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. John E. Anderson, 1993. "Use-Value Property Tax Assessment: Effects on Land Development," Land Economics, University of Wisconsin Press, vol. 69(3), pages 263-269.
    8. Khan, Mahmood Hasan, 2001. "Agricultural taxation in developing countries: a survey of issues and policy," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 24(3), March.
    9. World Bank, 2004. "India : Fiscal Decentralization to Rural Governments," World Bank Other Operational Studies 14674, The World Bank.
    10. Fiszbein, Ariel, 1997. "The Emergence of local capacity: Lessons from Colombia," World Development, Elsevier, vol. 25(7), pages 1029-1043, July.
    11. Richard M. Bird, 2006. "Taxing Land and Property in Emerging Economies: Raising Revenue...and More?," International Tax Program Papers 0605, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
    12. Robert Bennett, 1997. "Administrative Systems and Economic Spaces," Regional Studies, Taylor & Francis Journals, vol. 31(3), pages 323-336.
    13. Hoff, Karla, 1991. "Introduction: Agricultural Taxation and Land Rights Systems," World Bank Economic Review, World Bank Group, vol. 5(1), pages 85-91, January.
    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. Jorge Martinez-Vazquez, 2011. "Municipal Finances in Latin America: Features, Issues, and Prospects," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1107, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    More about this item

    Keywords

    property tax; rural local government;

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • R51 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Finance in Urban and Rural Economies

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