New Sources of Development Finance: Funding the Millennium Development Goals

Mobilizing additional finance to meet the challenges of the Millennium Development Goals (MDGs) is an urgent priority. Developing countries are mobilizing resources themselves to meet the MDG targets by 2015, but they will fall short without additional external flows. Increased private and public money is needed in order for the world's poorest countries to invest in the basic services and infrastructure necessary for human development, and to improve livelihoods and employment for poor people.As a result of the Five Year Review of the World Summit for Social Development, the UN General Assembly in September 2000 adopted a resolution calling for 'a rigorous analysis of the advantages, disadvantages and other implications of proposals for developing new and innovative sources of funding, both public and private, for dedication to social development and poverty eradication programmes'. The UN Department of Economic and Social Affairs in turn requested the World Institute for Development Economics Research (UNU-WIDER) in Helsinki to undertake a project on 'Innovative Sources for Development Finance'. This Policy Brief summarizes the key findings of the study carried out by UNUWIDER. Anthony B. Atkinson, Project Director and Warden of Nuffield College, University of Oxford, has written the Policy Brief drawing on the papers prepared for the project. He acknowledges the substantial contribution made by the project authors, but takes full responsibility for the opinions expressed

Income Tax and Top Incomes over the Twentieth Century

The first section of the paper gives a stylised account of the development of the UK income tax structure over the past 200 years, and refers to recent changes in other OECD countries. The second section turns to the distribution of income and summarises the evidence about the top of the income distribution that can be derived from the income tax data. The main results relate to the UK, but comparisons are made with similar evidence for Canada, France, the Netherlands, and the US. The third part of the paper considers the explanation of the observed changes in the distribution and the impact of progressive income taxation. How far are changes in income shares a reflection of the re-arrangement of income? How far are they associated with changes in the composition of top incomes? Conclusions about distributional incidence have to be based on modelling the determination of the personal income distribution, but such modelling is not typically treated in public finance textbooks. The fourth section of the paper considers how the analysis of distributional incidence can be developed, paying specific attention to the explanation of the upper tail of the distribution. : Income, Taxation, Income Distribution, Tax Incidence

Municipal commonage and implications for land reform: A profile of commonage users in Philippolis, Free State, South Africa

This paper reports on a survey of municipal commonage users, which was undertaken in Philippolis in the southern Free State, in May 2005. The survey showed that a significant number of commonage users are committed to their farming enterprises, as shown by five proxy indicators: Their readiness to plough their income into their farming enterprises; their sale of livestock; their desire for more land, and their willingness to pay rental to secure such land; their desire to farm on their own; and their desire to own their own land. The paper reflects on the significance of commonage in the context of the South African government’s land reform policy, and argues that commonage can transcend survivalist or subsistence production, and can be used as a “stepping stone” for emergent farmers to access their own land parcels. Finally, the paper argues that, if commonage is to become a key part in a “step-up” strategy of land reform, then appropriately sized land parcels should be made available for commonage users, to enable them to “exit” from commonage use and invest in smallholdings or small farms.Land Economics/Use,

Atmospheric chemistry of gas-phase polycyclic aromatic hydrocarbons: formation of atmospheric mutagens.

The atmospheric chemistry of the 2- to 4-ring polycyclic aromatic hydrocarbons (PAH), which exist mainly in the gas phase in the atmosphere, is discussed. The dominant loss process for the gas-phase PAH is by reaction with the hydroxyl radical, resulting in calculated lifetimes in the atmosphere of generally less than one day. The hydroxyl (OH) radical-initiated reactions and nitrate (NO3) radical-initiated reactions often lead to the formation of mutagenic nitro-PAH and other nitropolycyclic aromatic compounds, including nitrodibenzopyranones. These atmospheric reactions have a significant effect on ambient mutagenic activity, indicating that health risk assessments of combustion emissions should include atmospheric transformation products

On the identification of the “middle class”

The paper examines the identification of the “middle class” using data from LIS and LWS. It first considers definitions based purely on income, examining the rationale for different approaches and illustrating the implications for changes over time. It argues that the concept of “class” requires the examination of other dimensions beyond income. The paper considers the role of property and, drawing on the sociological literature, of occupations.class structure, income distribution

On analysing the world distribution of income

This paper argues that consideration of world inequality should cause us to re-examine the key concepts underlying the welfare approach to the measurement of income inequality and the inter-relation between the measurement of inequality and the measurement of poverty. There are three reasons why we feel that a re-examination is necessary: (i) the extent of global income differences means that we cannot simply carry over the methods used at a national level; we need a more flexible measure; (ii) we have to reconcile measures of world inequality and world poverty; and (iii) we need to explore more fully the different ways in which measures may be relative or absolute. This leads us to propose a new measure, which (a) combines poverty and inequality, including provision for those who are concerned only with poverty, (b) incorporates different approaches to the measurement of inequality; and (c) allows the cost of inequality to be expressed in different ways. Applied to the world distribution for the period 1820-1992, the new measure provides different perspectives on the evolution of global inequality.global income inequality, absolute vs. relative inequality, poverty, world citizens

The Distribution of Top Incomes in Five Anglo-Saxon Countries over the Twentieth Century

Taxation data have been used to create long-run series for the distribution of top incomes in quite a number of countries. Most of these studies have focused on the national experience of individual countries, but we can also learn from cross-country comparisons. Comparative analysis is therefore the next stage in the research program. At the same time, we know from other fields that there are dangers in simply pooling all available time series, without regard to the specific nature of data and reality. In this paper, we therefore adopt an intermediate approach, taking five Anglo-Saxon countries that have relatively similar backgrounds and tax systems: Australia, Canada, New Zealand, the UK, and the US. The first part of the paper tackles the challenge of comparability of income-tax based estimates across countries and across time. The second part summarizes the evidence about top income shares. Across these five countries, the shares of the very richest exhibit a strikingly similar pattern, falling in the three decades after World War II, before rising sharply from the mid-1970s onwards. The share of the top 1 percent is highly correlated across Anglo-Saxon countries, more so than the share of the next 4 percent. The third part of the paper looks at the relationship between taxes and top income shares. Controlling for country and year fixed effects, we find that a reduction in the marginal tax rate on wage income is associated with an increase in the share of the top percentile group. Likewise, a fall in the marginal tax rate on investment income (based on a lagged moving average) is associated with a rise in the share of the top percentile group.inequality, taxation, Australia, Canada, New Zealand, United Kingdom, United States

The Distribution of Top Incomes in Five Anglo-Saxon Countries over the Twentieth Century

Taxation data have been used to create long-run series for the distribution of top incomes in quite a number of countries. Most of these studies have focused on the national experience of individual countries, but we can also learn from cross-country comparisons. Comparative analysis is therefore the next stage in the research program. At the same time, we know from other fields that there are dangers in simply pooling all available time series, without regard to the specific nature of data and reality. In this paper, we therefore adopt an intermediate approach, taking five Anglo- Saxon countries that have relatively similar backgrounds and tax systems: Australia, Canada, New Zealand, the UK, and the US. The first part of the paper tackles the challenge of comparability of income-tax based estimates across countries and across time. The second part summarizes the evidence about top income shares. Across these five countries, the shares of the very richest exhibit a strikingly similar pattern, falling in the three decades after World War II, before rising sharply from the mid-1970s onwards. The share of the top 1 percent is highly correlated across Anglo-Saxon countries, more so than the share of the next 4 percent. The third part of the paper looks at the relationship between taxes and top income shares. Controlling for country and year fixed effects, we find that a reduction in the marginal tax rate on wage income is associated with an increase in the share of the top percentile group. Likewise, a fall in the marginal tax rate on investment income (based on a lagged moving average) is associated with a rise in the share of the top percentile group.inequality, taxation, Australia, Canada, New Zealand, United Kingdom, United States