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
Climate change and developing country interests
We consider the interplay of climate change impacts, global mitigation policies, and the interests of developing countries to 2050. Focusing on Malawi, Mozambique, and Zambia, we employ a structural approach to biophysical and economic modeling that...
Working Paper
Poverty and wellbeing impacts of microfinance
Over the last 35 years, microfinance has been generally regarded as an effective policy tool in the fight against poverty. Yet, the question of whether access to credit leads to poverty reduction and improved wellbeing remains open. To address this...
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...
Journal Article
Inequality
Part of Journal Special Issue
Inequality
Working Paper
Do multinational companies shift profits out of developing countries?
This study aims at providing causal evidence for tax-motivated profit-shifting out of developing countries, which, while often claimed to be the most affected, have been largely neglected in the literature. It uses global firm-level panel data from...
Journal Article
Does social spending improve welfare in low- and middle-income countries?
Over the past two decades, there has been unprecedented attention to the promotion of human development via government spending in the social sectors as a conditio sine qua non for economic growth and improved aggregate welfare. Yet the existing...
Working Paper
Understanding the boom
There are large volumes of gas offshore Tanzania, which has raised hopes of a boom. But those hopes look set to be disappointed. A boom would depend on there being a sizeable flow of revenue to government from producing and exporting gas. This paper...
Working Paper
Understanding the boom
A significant natural resource discovery creates excited popular expectations of imminent wealth. But the size of a boom is usually overestimated and the delay in receiving revenues is underestimated. This paper takes stock of the sequencing, timing...
Working Paper
Fiscal policy, state building and economic development
This paper presents a synopsis of the contextual conditions, factors and challenges under which the recent evolution of tax systems has taken place over the past three decades. The paper gives especial emphasis to the role of natural endowments...
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...
Working Paper
Structural transformation and international trade
How does international trade affect structural transformation in developing countries? We use data on sectoral allocation of labour and value-added in 46 developing economies over the period 1995–2017 and exploit for identification plausibly...
Journal Article
The dominant role of large firms in profit shifting
Globally, the largest 0.001 per cent of frms earn one-third of all corporate profts. Nonetheless, there is little understanding of how proft shifting difers across frm size. Using the universe of South African corporate tax returns and global...
Working Paper
Climate vulnerability and government resource mobilization in developing countries
There is substantial empirical literature on the impact of climate vulnerability on economic outcomes in developing countries. However, this literature is still weak on the impact of climate vulnerability on tax revenue mobilization. To enrich the...
Working Paper
Productivity growth effects of structural reforms
Which structural reforms affect labour productivity growth in developing countries? This paper answers this question by combining the local projections method and the inverse probability weighted regression adjustment (LP-IPWRA) method. We find that...
Working Paper
Financial liberalization and its implications for private savings in sub-Saharan Africa
This paper employs data from 103 developing countries between 1981 and 2012 to examine the determinants of private savings in sub-Saharan Africa (SSA), with a focus on the effect of financial liberalization on private savings. It also analyses why...
Journal Article
Gender and vulnerable employment in the developing world
This study investigates gender inequality in vulnerable employment: forms of employment typically featuring high precariousness, inadequate earnings, and lack of decent working conditions. Using a large collection of harmonized household surveys from...
Working Paper
Domestic savings in sub-Saharan Africa
One essential condition of economic progress in any society is an ample supply of savings, which depends on the growth of real capital.Economists agree that higher investment rates will lead to higher growth. Thus, domestic savings is considered an...
Working Paper
Employer power and employment in developing countries
The issue of employer power is underemphasized in the development literature. The default model is usually one of competitive labour markets. This assumption matters for analysis and policy prescription. There is growing evidence that the competitive...
Working Paper
The role of social protection and tax policies in cushioning crisis impacts on income and poverty in low- and middle-income countries
In the wake of the COVID-19 pandemic, several countries enacted tax and social protection measures to help mitigate the economic hardship faced by individuals and households. This experience underscores the need to better understand the impact of...
Working Paper
Microsimulation approaches to studying shocks and social protection in selected developing economies
This paper calculates automatic stabilization in Ghana, South Africa, and Ecuador to explain income cushioning amid income and demand shocks. Fiscal policies within these countries are also stress tested to gauge welfare contingencies and insurance...
Background Note
Artificial intelligence versus COVID-19 in developing countries
In this note, I will refer to current efforts to harness artificial intelligence (AI) in the push back against COVID-19, note its promises, limitations, potential pitfalls, and identify priorities for developing countries. Artificial Intelligence is...
Working Paper
Gender and vulnerable employment in the developing world
This paper investigates gender inequality in vulnerable employment: forms of employment typically featuring high precariousness, inadequate earnings, and lack of decent working conditions. Using a large collection of harmonized household surveys from...
Working Paper
Impact of female peer composition on gender norm perceptions and skills formation in secondary school
This paper examines peer effects on students’ gender norm perceptions and skills formation. I use a Uruguayan nationally representative survey of 9th grade students and exploit the quasi-random variation in the proportion of female peers across...
Working Paper
Does the adoption of peer-to-government mobile payments improve tax revenue mobilization in developing countries?
Developing countries need to raise sufficient tax revenue to finance development. Revenue mobilization is often hampered by limited tax compliance, weak institutions, and technical problems with tax collection. One solution to these challenges is...
Working Paper
Global distribution of revenue loss from tax avoidance
International corporate tax is an important source of government revenue, especially in lower-income countries. An important recent study of the scale of this problem was carried out by International Monetary Fund researchers Ernesto Crivelli, Ruud...
Journal Article
The tax elasticity of formal work in sub-Saharan Africa
When seeking to increase their tax revenues, policy-makers face a likely tradeoff between decreasing personal income tax rates (making formalizing more attractive and potentially contributing to revenue) and alternatively raising tax rates...
Working Paper
Inequality and voting in fragile countries
The political consequences of economic inequality have been debated in academic and policy circles for centuries. The nature of this relationship seems highly dependent on specific contexts, with empirical studies showing mixed evidence on how...
Working Paper
Estimating profit shifting in South Africa using firm-level tax returns
Using the universe of South African corporate tax returns for 2009–14, we estimate profit- and debt-shifting responses in South Africa. We find evidence that South African subsidiaries engage in profit shifting and that profit-shifting responses to...
Working Paper
Social norms as a barrier to women’s employment in developing countries
This paper discusses cultural barriers to women’s participation and success in the labor market in developing countries. I begin by describing how gender norms influence the relationship between economic development and female employment, as well as...
Working Paper
Welfare and redistributive effects of social assistance in the Global South
This paper presents an analysis of the recent evolution of social assistance in the developing world, looking at its complex typological configuration, which has interlinked with, and partly reflects the complex demographic and epidemiological...
Research Brief
Revenue losses from tax-motivated mispricing in South Africa
New research provides the first direct evidence of tax-motivated transfer mispricing in a developing country. Using highly detailed firm-level customs data from the tax authority, the analysis calculates the difference between legitimate estimates of...
Working Paper
Educational mobility in developing countries
This paper reviews the small but growing literature on intergenerational educational mobility in the developing world. Education is a critical determinant of economic well-being, and it predicts a range of non-pecuniary outcomes such as marriage...
Working Paper
Tax-motivated transfer mispricing in South Africa
This paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country. Using South African transaction-level customs data, I directly test for transfer price deviations from arm’s-length...
Research Brief
The impact of tax havens on South African revenue
The study uses a comparative analysis of foreign-owned firms operating in South Africa to show that firms with a parent registered in a tax haven tend to report 80% less in profits than similar firms without a parent in a tax haven. This is highly...
Working Paper
The tax elasticity of formal work in African countries
A key policy problem in most developing countries is the size of the informal sector and its persistence over time. In need to increase their tax revenues, policy makers face a trade-off between decreasing tax rates (making formalizing potentially...
Working Paper
Economic approach to intergenerational mobility
This paper provides a critical survey and synthesis of the recent economic literature on intergenerational mobility in developing countries, with a focus on data and methodological challenges. The attenuation due to measurement error is compounded by...
Working Paper
Income mobility in the developing world
This paper examines income mobility in developing countries. We start by synthesizing findings from the available evidence on relative mobility and poverty dynamics. We then describe evidence on economic mobility obtained via synthetic panels...
Working Paper
Can ‘good’ social mobility news be ‘bad’ and vice versa?
Limited attention has been paid to how well social mobility measures debated and used to study industrial countries perform in analysis of low-income settings. Following brief, selective reviews of the axiomatic and econometric literatures, three...
Working Paper
Big and ‘unprofitable’
Globally, the largest 0.001 per cent of firms earn roughly one-third of all corporate profits. Nonetheless, there is little understanding of how profit shifting differs across firm size. Using South African corporate tax returns from 2010–14, we...
Working Paper
Innovation efforts in developing countries
The identification of potential innovation efforts plays an important role in evaluating the innovation process. The innovation efforts of firms in developing countries might be different to those of Western enterprises. This paper evaluates...
Journal Article
Motherhood and flexible jobs
Part of Journal Special Issue
Women’s Work
Working Paper
Leapfrogging into the unknown
This paper traces a set of major trends and future scenarios in global structural change. It argues that across multiple domains of change, developing economies are facing novel constellations of lateness and prematurity in technological and economic...
Journal Article
Tax-motivated transfer mispricing in South Africa
This paper provides the first direct systematic evidence of profit shifting through transfer mispricing in a developing country. Using South African transaction-level customs data, the author directly tests for transfer price deviations from arm's...
Working Paper
Motherhood and flexible jobs
We study the causal effect of motherhood on labour market outcomes in Latin America by adopting an event study approach around the birth of the first child based on panel data from national household surveys for Chile, Mexico, Peru, and Uruguay.Our...
Book
Tasks, Skills, and Institutions
Developed countries have experienced a polarization in earnings and in employment, namely stronger growth in the earnings and jobs for the most and least skilled workers at the expense of those in the middle. This pattern has been attributed to...