The Political Economy of Taxation and Tax Reform in Developing Countries

taxation, tax reform, political economy, state capacity, developing countries

Political Settlements: Issues paper

Why do similar sets of formal institutions often have such divergent outcomes? An analysis of political settlements goes some way to answering this question by bringing into focus the contending interests that exist within any state, which constrain and facilitate institutional and developmental change. It provides a framework to analyse how the state is linked to society and what lies behind the formal representation of politics in a state. The political settlement and the elite bargains from which it emerges are central to patterns of state fragility and resilience. The role of political organisation within the political settlement is crucial to both the stability of the settlement and the direction in which it evolves over time. The elite bargains that may lead to the establishment of what might be considered a resilient political settlement may also act as a barrier to progressive developmental change. Analysis of political settlements suggests that state-building is far from a set of technical formulas, but is a highly political process. Creating capacity within a state to consolidate and expand taxation is fundamentally determined by the shape of the political settlement underlying the state. This is true as well for the development of service delivery or any other function of the state. This analytical framework provides a window for donors to grasp the politics of a place in order to design more effective interventions

Fiscalidad, gobernanza y movilización de recursos en el África Subsahariana: los temas clave

El presente documento tiene por objeto presentar algunos debates teóricos y políticos clave en torno a las relaciones que existen entre fiscalidad, ayuda exterior, gobernanza y organización política en la economía política del desarrollo en el África Subsahariana. El documento se centra especialmente en tres áreas principales: (1) debates sobre teorías y políticas en materia de fiscalidad en el África Subsahariana; (2) en qué medida la abundancia de recursos minerales resulta una maldición o una bendición para el crecimiento y la estabilidad política; y (3) cómo y por qué las organizaciones políticas son fundamentales para comprender la capacidad de resistencia del Estado en África

‘Failed States’ in Sub-Saharan Africa: A Review of the Literature

The concept and measurement of ‘failed states’ is not generally helpful in understanding the economic and political realities in Sub-Saharan Africa. This paper undertakes a review of the literature that addresses the concept, measurement and causes of ‘failed states’ in Sub-Saharan Africa. It finds that concept and measurement of ‘failed states’ is not generally helpful in understanding economic and political realities in Sub-Saharan Africa. In particular, it argues that an aggregate index of state performance is unhelpful for policymakers because it misses the wide range of capacity across different state functions within polities. It also finds that the main theories attempting to explain ‘state failure’ have important theoretical shortcomings and are not supported by the evidence. Finally, the paper examines the political economy behind why some states in the region are more resilient than others

The ‘Resource Curse’: Theory and Evidence

Mineral and fuel abundance does not determine either the political or economic trajectory of less developed countries. This paper undertakes a critical survey of the ‘resource curse’ –the idea that mineral and fuel abundance generates poor economic performance in less developed countries–. It examines the proposition that mineral and fuel abundance generates growth-restricting forms of state intervention and extraordinarily large degrees of rent-seeking and corruption, which are generally argued to be negative in terms of the economic growth outcomes they generate. The analysis surveys the Dutch Disease, rentier state, and rent-seeking versions of the resource curse and finds they have significant shortcomings in terms of both theory and evidence. It also discusses particular growth strategies that have been effective in producing long-run economic growth in mineral- and fuel-abundant developing countries

Social Service Delivery in Violent Contexts: Achieving Results Against the Odds. A report from Afghanistan, Pakistan, and Nepal

This report provides the foundation for a new approach to service delivery in violence-affected contexts that is sensitive to the actual forms of violence, politics, and bargaining encountered in many conflict-affected states. The findings unearth issues about how development organizations should approach service delivery in contested settings. As many countries today are riven by conflict and internal division, some familiar rules of the game may be inadequate to deal with the mounting humanitarian and development challenges posed by complex conflict situations, particularly where affected people need access to social services. This raises dilemmas about the ethical and political judgments and trade-offs that development actors frequently have to make. A key challenge is whether development actors can adapt their procedures and ways of working to the fluidity, uncertainties, and risk taking that the new, conflict-riven landscape demands while preserving financial accountability, doing no harm, and ensuring aid effectiveness. Based on research in Afghanistan, Pakistan and Nepal, the report probes how social service delivery is affected by violent conflict and what are the critical factors that make or break successful delivery