A Fiscal History of Ethiopia: Taxation and Aid Dependence 1960-2010

This paper reviews the fiscal history of Ethiopia, focusing particularly on the period between 1960 and 2010, for which detailed fiscal data is available to underpin the analysis. While reviewing the key fiscal and economic events of this period, particular attention is paid to the relation between Ethiopia and its donors, which in fiscal terms can be seen as a relation between mobilising own tax revenue while negotiating aid and the conditions attached to it. While looking at the main drivers and constraints to tax revenue mobilisation in this period, the paper explores the role that aid and donors have played, and how this historical background influences Ethiopia today

Tax revenue mobilisation in Ethiopia

This thesis analyses tax revenue mobilisation in Ethiopia. The main research question motivating the thesis regards the existence of a crowding out effect of foreign aid on domestic public revenue. Throughout the research we are also able to identify other constraints and opportunities for tax revenue mobilisation in Ethiopia, to shed light on broader budget dynamics and to provide firm-level evidence on effective tax rates in the Ethiopian manufacturing sector. The thesis therefore contributes to the current debate on tax revenue mobilisation in Africa by providing comprehensive evidence from Ethiopia, using longer time series than most other studies in this literature. Moreover it provides a new theoretical framework to analyse the aid-tax relation. In addition it contributes to the very small evidence base on taxation at the firm level in Africa by virtually doubling the literature and by proposing a theoretical framework for further research. The thesis starts with a qualitative analysis of the Ethiopian fiscal history between 1960 and 2009. This chapter is based on a descriptive analysis of Ethiopian fiscal data, on the study of secondary sources and on in-depth qualitative interviews. On the basis of this deep understanding of the Ethiopian context, the thesis proceeds by developing a theoretical framework to explain the possible substitution effect between aid and tax. An empirical estimation of the model stemming from the theory shows that aid is positively associated with tax revenues. Other determinants of the tax ratio to GDP are found to be: trade openness, the manufacturing sector, the agricultural sector and governance. The following chapter takes a broader look at budget dynamics by using the cointegrated VAR methodology. The results confirm the positive relation between aid and tax. In addition we find evidence for the existence of a domestic budget equilibrium and for a positive association between aid and capital expenditure in particular. Finally the thesis takes a microeconomic look at taxation by analyzing effective tax rates amongst Ethiopian firms. I find that while tax incentives are widely used in Ethiopia, they do not seem to be affected by lobbying or political connections of the firm

Aid and Taxation in Ethiopia

The relation between aid and taxation is largely contested in the literature. On the one hand, aid may act as a substitute for tax revenue and thus have a crowding-out effect. It can also have a detrimental effect on domestic tax institutions. On the other hand, it can promote and support tax mobilisation through policy advice, technical assistance, and conditionality, in addition to more indirect channels. The case of Ethiopia supports the existence of a positive relation between aid and tax, which occurs mainly through policy advice and technical assistance rather than conditionality. This finding is grounded in both quantitative and qualitative analysis

Recensione di Marc Humbert, Yoshimichi Sato (eds), Social Exclusion. Perspectives from France and Japan, Melbourne, Trans Pacific Press, 2012, pages 176, ISBN: 978-1-920901-69-1

A brief introduction of the book "Social Exclusion. Perspectives from France and Japan" edited by Marc Humbert and Yoshimichi Sato: a collection of self contained essays, focused on the crucial theme of the social exclusion from the particular perspective of French and Japanese societie

Is Fiscal Decentralisation Delivering on its Promises? A Review of the Theory and Practice in Developing Countries

Fiscal decentralisation has become a widespread phenomenon in developing countries and it has attracted increasing attention in the past few decades. The supporters of decentralisation argue that it can bring about positive outcomes, whether economic or political in nature. For example, since local governments are closer to citizens, they can be expected to be more responsive to their needs. In addition, decentralisation may trigger positive effects in terms of political participation and accountability. Whether these theoretical benefits are achieved in practice is an open question that this paper aims to address. After providing an overview of the main issues and challenges in the design and implementation of fiscal decentralisation, the paper reviews the existing evidence on the impact of fiscal decentralisation on economic and political outcomes at the local level. By doing this it aims to assess whether decentralisation delivered on its promises

The Corporate Tax Burden in Ethiopia: Evidence from Anonymised Tax Returns

effective tax rates; Ethiopia; corporate taxation; administrative data.This paper computes and analyses the tax burden on Ethiopian corporations, measured by the average effective tax rate (ETR) on their profit. Our strongest result regards the relation between tax burdens and firm size. We find a statistically significant U-shaped relation between ETR and size. While small firms face the highest tax burden, the largest firms still pay more than middle-sized firms. It is this latter group that benefits from lower tax burdens. These results suggest that both small and large firms face constraints in minimising their taxes, but these constraints are fundamentally different. While small firms do not have the capacity and resources to fully exploit the tax system, large firms are highly visible and under greater scrutiny by the tax authority. This speculative interpretation is supported by the available data on firms’ deductions. We also find that exporting firms, firms that pay their taxes in regional offices as opposed to Addis Ababa, and firms with higher leverage have lower tax burdens.DfID, NORAD

Higher education training in social work in Albania: insights from the experiences of the T@sk project

In March 2020, the European Union decided to open accession negotiations with Albania, candidate country since 2014. In order to achieve this important goal in the long path of European integration, Albania had to pursue a set of requirements. Among them, the centrality of human rights affects the implementation of policies aiming at integrating minorities, as well as at granting social rights to unprivileged citizens (La Cava Nanetti 2000, Solidar 2016). In this scenario, the evolution of the professional expertise of Albanian social workers plays a relevant role. In academic and professional terms, social work has a poor tradition in Albania, as in most of post-communist countries (Hoti 2015). In order to face the difficulties of the professional and academic evolution of social work and to facilitate a process of Europeanisation of the Social Services delivery in Albania, the European Commission has funded the project T@sk Towards Increased Awareness, Responsibility and Shared Quality in Social work (2017-2020). The main aim of the project consists in strengthening the delivery of Social Services in Albania through the empowerment of the Higher Education system in social work. The consortium includes all public universities offering BA and MA courses in social work in Albania – University of Tirana, University of Shkoder and University of Elbasan –, and the University of Florence, the UCM of Madrid, the ISCTE of Lisbon and the Professional Order of Social workers of the Tuscany Region as Higher Education institutions of the program countries. The project operates at three levels: peer-to peer theoretical and empirical update amongst the project partners; triangulation of knowledge, transdisciplinary cooperation with the societal stakeholders and digital innovation; selection and dissemination of best practices. The project was concluded in December 2020 and it is possible to elaborate on the main theoretical and empirical framework adopted, on the results achieved, and on the challenges to create a favorable environment for the development of social work profession in Albania. The article sheds light in the pattern of evolution of social work practices in Albania, focusing on the social and cultural background of the country, and describing the main achievements of the T@sk project

Are There Any Reliable Data on Wages in Low-Income Countries? Observations and Lessons from Ethiopia

Administrative data from tax returns have recently become available in many African countries thanks to the modernisation of revenue authorities and the digitisation of tax records. The availability of these data has opened new opportunities for policy-relevant analysis of real-life taxpaying behaviour. However, despite the increased availability of these data, a gap remains in many countries in relation to administrative records on employment incomes. Without these records, it is very difficult to obtain a realistic picture of income distribution and its evolution, and to understand how policies and macroeconomic conditions, such as high inflation, affect the welfare of workers. In this study, we explore the current state of administrative wage data in Ethiopia and the main challenges that limit their availability and reliability, and identify three key patterns.UKAIDBill and Melinda Gates Foundatio