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Financing development goals in times of crisisPursuing the global development agenda will require genuine commitment from political leaders and significant stepping-up of government efforts. But...
This project will combine country case studies, cross-country econometric analysis and comparative historical analysis to examine the effects of fiscal states in low- and middle-income countries and its economic, political and historical determinants.
A central aspect of institutional development in developing economies is building tax systems capable of raising revenues from broad tax bases, i.e. acquiring fiscal capacity. While it is recognised that fiscal capacity is pivotal for state-building and economic development, it is less clear what its origins are and what explains its cross-country differences.
This research will combine qualitative country case studies with microeconometrics and cross-country econometric analysis to examine the economic, political and historical determinants of fiscal (taxation) capacity in low- and middle-income countries. Facilitating a new collaborative discussion among a group of political scientists, economic historians and economists, this project aims to consolidate knowledge and to set an agenda for future research in this area. We anticipate that commissioned papers will be published in a special issue of a leading journal. Additionally, the project will produce a clear set of policy guidelines for development agencies and policy makers in developing countries.
Key questions
- What are the developmental implications of fiscal states? Does the emergence of a fiscal state relieve poverty and reduce inequality? How does it happen? Will it lead to improved health and education infrastructures? And what will the effects be on specific health and education outcomes? How will this affect income poverty and inequality? And what will the effects be on different segments of the population? Do the developmental implications of fiscal states differ by the resource abundance of the country? What does past experience suggest? Will it lead to more efficient allocations of public resources to fight poverty?
- How do fiscal states in developing countries arise? What are the long-run effects of colonisation? Does foreign aid foster or hinder fiscal capacity? Are fiscal states less likely to emerge in resource rich economies? What are the historical conditions for the emergence of fiscally capable states in less developed economies? What does past experience suggest? Does economic inequality hinder or help a fiscal bargain between the state and the citizens?
See a list of collaborating researchers and research paper topics here.
UN’s 2030 Agenda for Sustainable Development
This project will produce knowledge fundamental to achieving SDG16 (building strong institutions).
This project is part of the 'Domestic Revenue Mobilization' programme.
TEAM
Focal points: Kunal Sen and Abrams Tagem
Core researcher: Antonio Savoia
Project support: Jutta Stenholm
Communications: Anna Toppari
In partnership
Financial support from the Norwegian Agency for Development Cooperation (Norad)
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Pre-colonial politics affects tax compliance in modern day UgandaParts of Uganda that had centralised political systems before colonial rule are more likely to have higher rates of voluntary tax compliance. Merima...
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Will a revenue boom support development in resource-rich economies?The post-COVID-19 economic recovery and Russia’s war with Ukraine have caused some natural resource prices to reach new highs. Although forecasting...
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What determines tax revenues mobilization?
Tax revenues and political institutions placing constraints on the executive power may reinforce each other over time and this may also bring a shift...
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State assigned property rights and revenue collection in sub-Saharan AfricaAcross sub-Saharan African (SSA) countries there are striking differences in citizen willingness to pay taxes. For example, in Mali, Senegal, and...
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Are autocratic states doomed to weak fiscal capacity?
How best to increase and mobilize revenue is a key issue that confronts contemporary developing economies, but the same problems were faced —and...
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Fiscal states in developing economies: Why do they matter and where do they come from?Modern states are complex organizations which perform a broad range of functions. They have an important role in economic and human development. The...
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Tax revenues and tax capacity in sub-Saharan AfricaAfrican countries raise lower amounts of tax as a share of national income (GDP) than other countries. Researchers are interested in understanding why...
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Do resource rich economies have better or worse human development outcomes?Although increasingly challenged, we often hear that being resource rich can adversely affect growth prospects. Here we concentrate instead on a...
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South Asia: how to ensure progress on reducing poverty isn't reversed by coronavirusSouth Asia accounted for nearly two-fifths of the world’s poor, nearly half of the world’s malnourished children and was home to the largest number of...
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Theme: 2019-23, Transforming states