Working Paper
What makes countries negotiate away their corporate tax base?
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...
Working Paper
On the Effects of Formalization on Taxes and Wages
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...
Working Paper
Tax-benefit microsimulation modelling in Zambia
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...
Journal Article
Public Provision, Commodity Demand, and Hours of Work
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...
Journal Article
How should commodities be taxed?
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...
Working Paper
Public and Private Expenditures on Human Capital Accumulation in India
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...
Working Paper
Is There a Brazilian Model of Development?
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...
Working Paper
Tax-benefit microsimulation in Ecuador
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...
Journal Article
The Welfare Effects of Health-based Food Tax Policy
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...
Journal Article
On the Short- and Medium-Term Effects of Formalisation
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...
Working Paper
Quantifying the impacts of expanding social protection on efficiency and equity
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...
Working Paper
Inequality and fiscal redistribution in Mexico
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...
Working Paper
Tax-benefit microsimulation modelling in Tanzania
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...
Policy Brief
Fiscal Policy for Poverty Reduction, Reconstruction, and Growth
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...
Working Paper
The economics and politics of foreign aid and domestic revenue
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...
Working Paper
The Fiscal Effects of Aid in Ghana
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...
Working Paper
Enforcement and Compliance in Lima's Street Markets
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...
Report
SOUTHMOD Country Report Viet Nam - VNMOD v1.0
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...
Journal Article
Estimating labour supply elasticities based on cross-country micro data
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...
Working Paper
Income Distribution and Tax, and Government Social Spending Policies in Developing Countries
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...
Working Paper
Increased Income Inequality in OECD Countries and the Redistributive Impact of the Government Budget
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...
Working Paper
Development Assistance and Development Finance
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...
Working Paper
Are less developed countries more exposed to multinational tax avoidance?
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...
Journal Special Issue
Fiscal Policy, State Building and Economic Development
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...
Journal Article
The impact of intergovernmental transfers on local revenue generation in Sub-Saharan Africa
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...
Journal Article
The Effects of the Value-Added Tax on Revenue and Inequality
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...
Working Paper
The effects of taxation on income inequality in sub-Saharan Africa
This paper investigates the effects of taxation on income inequality in an unbalanced panel of 45 countries in sub-Saharan Africa over the period 1980–2018. We use instrumental-variable two-stage least squares and instrumental-variable quantile...
Working Paper
Global profit shifting, 1975–2019
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)...
Report
SOUTHMOD country report Uganda - UGAMOD v1.8
View the latest UGAMOD country report here. 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...
Working Paper
Fiscal dependence on extractive revenues
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...