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From the Editor's Desk (March 2012)![Placeholder](https://www.wider.unu.edu/sites/default/files/styles/expert_45x45/public/tony_addison_87363af4b3de300e5211e81b8d521d70.png?itok=-MPVkzbW)
Tony Addison With the ice floes now gone from the harbour outside the UNU-WIDER building, and with the snow replaced by an icy hail, there is a...
Tony Addison With the ice floes now gone from the harbour outside the UNU-WIDER building, and with the snow replaced by an icy hail, there is a...
Tony Addison January saw the snow arrive in Helsinki. As I look out across the harbour, the scene is one of various shades of white and grey. The...
Tony Addison It’s now February, and Helsinki remains deep in snow. We had an extended blizzard last weekend, with temperatures hovering around minus...
Tony Addison As we come to the end of November, the snow has yet to arrive in Helsinki. We continue to enjoy clear skies and spectacular sunsets...
Tony Addison Today, there is much frustration with the financial sector. Society’s precious savings are not being put to the best of uses—investing...
Qualitative case studies suggest that the outcomes of tax treaty negotiations are determined by power politics and negotiating capability. In contrast, quantitative studies have tended to depart from a model that implies absolute gains, full...
GUESTAngle John Langmore and Perrin Wilkins When delivering the eighth WIDER Annual Lecture on rethinking growth strategies in 2004 Dani Rodrik...
24 January 2014 In this interview Armando Barrientos and Ed Amann give an introduction to their research project at the Brooks World Poverty Institute...
Based on a unique panel dataset consisting of both formal and informal firms surveyed every other year from 2005 to 2013, this paper explores the benefits of formalization to the government and firm employees in Vietnam. We find that formalization...
This study presents the findings from a feasibility study on the potential for developing a static tax-benefit microsimulation model for Zambia. The paper focuses on the details of the tax-benefit system and possible data sources, building on...
The theoretical analysis of optimal commodity taxation is advanced, but there is only limited empirical evidence to guide commodity tax policies. With this paper, we contribute to this body of literature by empirically examining, using Finnish...
The Mirrlees Review recommends that commodity taxation should in general be uniform, but with some goods consumed in conjunction with labour supply (such as child care) left untaxed. This article examines the validity of this claim in an optimal...
We study a model of human capital driven growth, where the parent’s human capital serves as a productive input in the child’s human capital production only when that of the former exceeds a minimum level required to intellectually contribute to the...
Brazil’s recent growth has been intensely pro-poor, and both poverty and inequality have declined significantly in the last decade. It has been suggested that Brazil’s unexpected successes are the outcome of a new model of development. The paper...
The aim of this study is to evaluate the feasibility to implement a tax and benefit microsimulation model for Ecuador using EUROMOD as an interface. We first present a detailed description of the main components of the tax and benefit system in...
This paper examines the effects of health-oriented food tax reforms on the distribution of tax payments, food demand and health outcomes. We offer an illustration of how one can take into account the uncertainty related to both demand estimation and...
This paper analyses the consequences of formalisation on the performance of informal firms, using a panel dataset from Vietnam. We find that switching firms (before switching) have higher profit and value added compared to non-switching firms...
Part of Journal Special Issue Economics of climate change impacts on developing countries
A large informal sector is a challenge for developing countries building up social protection systems. Expanding social safety nets reduces poverty, but financing them can increase the tax burden, potentially reducing availability of formal sector...
This paper uses income and expenditure surveys from 1992 to 2014 and public tax and spending accounts to estimate the redistributive impact of Mexico’s fiscal system over this period. It presents standard and marginal benefit incidence analysis for...
This paper presents the findings from a feasibility study on the potential for developing a static tax-benefit microsimulation model for Tanzania. The paper provides an account of the current tax-benefit system in Tanzania and introduces the survey...
Growth, poverty reduction, and social peace are all undermined when public expenditure management and taxation are weak and when the fiscal deficit and public debt are not managed successfully. And large-scale aid and debt relief cannot work without...
The main argument of this paper is that there is considerable heterogeneity in the way aid can shape tax performance in developing countries: through behavioural effects, donor conditionality, recipient policy reform and technical assistance; and...
An important feature of aid to developing countries is that it is given to the government. As a result, aid should be expected to affect fiscal behaviour, although theory and existing evidence is ambiguous regarding the nature of these effects. This...
Almost twenty years have passed since researchers from the Institute for Liberty and Democracy in Peru showed how ‘bad laws’ impose disproportionate costs on those who choose formality. Although a multitude of conflicting regulations still precludes...
View the latest VNMOD country report here. This report documents VNMOD, the SOUTHMOD model developed for Viet Nam. This work was carried out by the Central Institute for Economic Management (CIEM) in collaboration with KU Leuven and the project...
Let’s face it, data is important. It sits at the core of almost everything that we in the development economics research community do. However, the...
The Nordic model relies on high tax rates to finance an extensive welfare state. If labour supply elasticities are large, the burden of financing the model can be large even if, arguably, the practice of providing subsidised goods that support labour...
This paper reviews income distribution in developing (and transition) countries in recent decades. On average, before-tax income distribution is less unequal in developing countries than it is in industrial countries. However, unlike industrial...
The sculpture below in Mexico City is called ‘El Ángel de la Securidad Social’ (The Angel of Social Security) and was created by Jorge Marín in 2013...
The recent rise in inequality in the distribution of disposable income in many, although not all, countries has led to a search for explanations, particularly since for much of the postwar period falling inequality has been the norm. In OECD...
In recent years many global firms—including Starbucks, Google, and Amazon—have come under fire for avoiding paying taxes in one country by shifting...
Understanding the development effects of official aid is crucial to building a better bridge between research and policy. This paper reviews the current evidence regarding the impact of aid on growth and poverty reduction, and develops a new...
NOTE | Revised version May 2017 available. View and download the revised version. We use a global dataset with information on 210,000 corporations in 102 countries to investigate whether cross-border profit shifting by multinational firms is more...
This journal presents a synopsis of the contextual conditions, factors and challenges under which the recent evolution of tax systems has taken place, as an introduction to this United Nations University-World Institute for Development Economics...
Part of Journal Special Issue Fiscal Policy, State Building and Economic Development
Do intergovernmental transfers reduce revenues collected by local government authorities (LGAs)? There is already a well-established body of literature in public finance, which argues that intergovernmental grants “crowd out” local revenues. Most...
This paper examines the impact of the introduction of the value-added tax on inequality and government revenues using newly released macro data. We present both conventional country fixed effect regressions and instrumental variable analyses, where...
This paper constructs time series of global profit shifting covering the 2015–19 period, during which major international efforts were implemented to curb profit shifting. We find that (i) multinational profits grew faster than global profits, (ii)...
The importance of domestic revenue mobilization and taxation for sustainable development is widely acknowledged in global development discussions, but...
The aims of this paper are twofold. It firstly identifies and discusses the extent to which public revenues from natural resources are adequately captured in existing cross-country revenue databases, before exploring the extent to which such data can...
About a decade ago, the world’s biggest economies agreed to crack down on multinational corporations’ abusive use of tax havens. This resulted in a 15...
This report documents GHAMOD, the SOUTHMOD model developed for Ghana. The report describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It...
This report documents MOZMOD, the SOUTHMOD model developed for Mozambique. It describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It...
This report documents UGAMOD, the SOUTHMOD model developed for Uganda. It describes the different tax–benefit policies in place, how the microsimulation model picks up these different provisions, and the database on which the model runs. It concludes...
This report documents MicroZAMOD, the SOUTHMOD model developed for Zambia. This work was carried out by Zambia Institute for Policy Analysis & Research (ZIPAR) in collaboration with the project partners. The results presented in this report are...
This report documents VNMOD, the SOUTHMOD model developed for Viet Nam. This work has been carried out by the Central Institute for Economic Management (CIEM) in collaboration with UNU-WIDER and SASPRI. The results presented in this report are...
Part of Journal Special Issue Fiscal state capacity
This report documents ECUAMOD, the SOUTHMOD micrososimulation model developed for Ecuador. It describes the different tax–benefit policies in place, how the microsimulation model takes advantage of these different provisions, and the database on...
This paper assesses the feasibility of simulating the distributional impacts produced by various tax and transfer instruments in Vietnam. Vietnam’s system of tax and transfer policies underwent frequent changes, in terms of diversity and adjustment...
This paper studies the effectiveness of tax amnesties and their impacts on capital taxation and public spending. We leverage rich policy variation from Argentina, where left- and right-wing governments implemented multiple programmes and achieved...
Across Africa, governments are now waking up to the fact that taxation targets or economic development goals will not be met without policies that are...
View the latest MicroZAMOD country report here. This report documents MicroZAMOD, the SOUTHMOD model developed for Zambia. This work was carried out by Zambia Institute for Policy Analysis & Research (ZIPAR) in collaboration with the project partners...
In the wake of the COVID-19 pandemic, several countries enacted tax and social protection measures to help mitigate the economic hardship faced by individuals and households. This experience underscores the need to better understand the impact of...
The world has been trying to curb profit shifting to tax havens for a decade, but consistent time series evaluating the impact of these reforms have...
View the latest ECUAMOD country report here. This report documents ECUAMOD, the SOUTHMOD micrososimulation model developed for Ecuador. The report describes the different tax–benefit policies in place, how the microsimulation model takes advantage of...
View the latest UGAMOD country report here. This report documents UGAMOD, the SOUTHMOD model developed for Uganda. The report describes the different tax–benefit policies in place, how the microsimulation model picks up these different provisions...
The arguments that property rights and taxation positively affect development are well established in separate literatures, but the link between property rights and taxation is under-studied.To address this gap, we theorize that formalization of...
This paper contributes to the debate on domestic revenue mobilization and state-building in the Global South by asking whether there are fiscal states in sub-Saharan Africa. To answer this question, we review the diverse understandings of the fiscal...
This paper combines cross-national statistical analysis and in-depth historical case studies of Argentina and Chile to explore the relationship between two crucial dimensions of state capacity.We show that information capacity contributes to the...
Agricultural subsidies may have significant productive and distributional consequences, and policy-makers need to be able to assess these impacts as a part of the overall tax and benefit policy. Microsimulation models offer a tool for such analysis...
View the latest MOZMOD country report here. This report documents MOZMOD, the SOUTHMOD model developed for Mozambique. It describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and...
How can we determine the taxation of wage earners or multinational corporations in a fair manner? Will simplifying tax administration help increase...
View the latest GHAMOD country report here. This report documents GHAMOD, the SOUTHMOD model developed for Ghana. The report describes the different tax-benefit policies in place, how the microsimulation model picks up these different provisions, and...
Much of UNU-WIDER’s research in the last few years was initiated under the 2010-13 work programme on the triple crisis of finance, food, and climate...
Aid’s future, its history, and its impact were the topics of a policy workshop held by UNU-WIDER in co-operation with the Embassy of Denmark in Dar es...
I recently returned from a week at the University of Western Cape (UWC) in South Africa, speaking at a conference honouring Nobel laureate Desmond...
The white-painted cluster of traditional style buildings might suggest that this was a farm on the South African veldt. Not so however—it was Trade...
There has long been an emphasis on the importance of decentralization in providing better quality public services in the developing world. In order to assess the effectiveness of decentralization I examine here the case study of Uganda, which has...
The mixed record on the 2015 Millennium Development Goal (MDG) targets and the focus on global public goods in post-MDG debates questions the future of traditional development co-operation (official development assistance, ODA). Meanwhile...
It is a widely accept projection that many low income countries (LICs) will remain low income for some time to come. Consequently, when assessing the policy options available to LICs it is important to take a long-term view. In the WIDER Working...
A dynamic relationship between foreign aid and domestic fiscal variables in Uganda is analysed using a cointegrated vector autoregressive model over the period 1972-2008. Results show that aid is a significant element of long-run fiscal equilibrium...
Recent years have seen a growing interest among donors on taxation in developing countries. This reflects a concern for domestic revenue mobilization to finance public goods and services, as well as recognition of the centrality of taxation for...
This paper proposes to understand a singular but salient factor that enables the wealthy to deflect their tax burden downwards: elites’ political leverage to shape legislation via their capacity to influence political actors and policy outcomes. The...
When seeking to increase their tax revenues, policy-makers face a likely tradeoff between decreasing personal income tax rates (making formalizing more attractive and potentially contributing to revenue) and alternatively raising tax rates...
Improving tax systems is important for multiple reasons. For Kenya, finding ways to mobilize domestic revenue streams is critical to cutting the...
This Technical Note describes Ugandan trade data covering import and export declarations for ten calendar years from January 2013 to December 2022, constructed from transactional-level Ugandan administrative data. The trade data series contains...
Pursuing the global development agenda will require genuine commitment from political leaders and significant stepping-up of government efforts. But...
After tax reforms in the 1980s and 1990s, income inequality increased in many Latin American countries The tax reforms of the 2000s have been more equalizing in terms of income inequality: Argentina, Honduras and Nicaragua have seen the most...
One key element in the reduction of poverty and (in Latin America) inequality has been the achievement of greater fiscal equity; we analyse one key part of this process, which is the earmarking of portions of tax revenue to be spent on progressive...
Part of Book Institutional Change and Economic Development
Tax havens have become a defining feature of the global financial system. Multinational companies can use various schemes to avoid paying taxes in...
International development organizations largely agree that illicit capital flight from developing countries is an obstacle for development. And...
This paper studies the relationship between trade tax and domestic tax reforms and poverty in developing countries, and explores whether the role of public goods provision matters in this relationship. Using a sample of 91 developing countries for...
View the latest MOZMOD country report here. This report documents MOZMOD, the SOUTHMOD model developed for Mozambique. This work was carried out by the Ministry of Economy and Finance of Mozambique in collaboration with the project partners in the...
View the latest UGAMOD country report here. This report documents UGAMOD, the SOUTHMOD model developed for Uganda. This work was carried out by Uganda Revenue Authority (URA) and Makerere University in collaboration with the project partners. The...
A key policy problem in most developing countries is the size of the informal sector and its persistence over time. In need to increase their tax revenues, policy makers face a trade-off between decreasing tax rates (making formalizing potentially...
Some of the ways that have recently been discussed for increasing significantly the own resources of developing countries, or the amount or usefulness of the overseas aid that they receive, are potentially promising politically. This is because the...
In 1991 the Ethiopian Revolution Democratic Front (EPRDF) toppled the old ‘socialist’ regime that had ruled the country for seventeen years. In contrast to the previous policy regime of hard control, EPRDF initiated a wide range of reforms that...
New institutional economics lacks a theory of state formation which could help us to deal with the mega question of why some states became more efficient than others at establishing and sustaining institutions. Some kind of middle range theory could...
Taxation provides one of the principal lenses in measuring state capacity, state formation and power relations in a society. This paper critically examines three main approaches (economic, administrative and political economy) to understanding...
View the latest MicroZAMOD country report here. This report documents MicroZAMOD, the SOUTHMOD model developed for Zambia. This work was carried out by Zambia Institute for Policy Analysis & Research (ZIPAR) in collaboration with the project partners...
Use of migration tax as an instrument for financing development expenditure in poorer countries has received renewed attention recently and is evolving as an important subject of research in development economics. This paper discusses a related issue...
This paper reviews the challenges and experiences in rebuilding fiscal institutions in postconflict environments, based on advice from the IMF's Fiscal Affairs Department to selected countries. The recommended strategy involved a three-step process...
View the latest ECUAMOD country report here. This report documents ECUAMOD, the SOUTHMOD micrososimulation model developed for Ecuador. This work was carried out by the ISER in collaboration with the Instituto de Altos Estudios Nacionales and UNU...