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public finance

Taxing Clients? How Clientelism Hurts Citizen Tax Morale in Benin: Guest post by Sanata Sy-Sahande

This is the seventh in this year’s job market series.
Developing countries regularly underperform in their capacity to collect taxes, with tax revenue to GDP ratios that are 20 to 30 percent less than those of high-income countries (Besley and Persson, 2014). This tax capacity gap represents lost revenue that could have provided much-needed public goods and services while reducing reliance on foreign aid. This issue is especially relevant in Africa, where “shadow economies” comprise up to 75% of national GDP (Schneider and Enste 2000), indicating that large swaths of these countries’ populations manage to evade taxation. What accounts for this failure to convince citizens to pay taxes?
 
Structural roadblocks to tax collections in developing countries include poor service quality, dysfunctional bureaucracies, and outdated equipment. In contrast, my job market paper provides a political explanation centered on clientelism, or politicians' exchange of targeted goods for votes from loyal supporters.

Building alliances, gaining public trust: Chile’s financial management reforms

Dmitri Gourfinkel's picture

Also available in: Español

Santiago de Chile. Photo: alobos Life via Flickr (under CC license) 


Note from the editors: The following is an interview with Patricia Arriagada, former acting Comptroller General of Chile, and Patricio Barra Aeloiza, Head of Accounting Analysis Division of the Comptroller General Office, who have been instrumental in recent reforms of public financial management systems in Chile.

Starting in 2010, Chile embarked on a journey to improve public sector accounting by converging to an international standard of financial reporting by 2016. The country expects to produce its first fully compliant financial statements in 2019. One main objective of this reform is to ensure that financial information generated by the government accounting system is comprehensive, reliable, and useful for decision-making. Another is to increase the levels of fiscal and financial transparency and accountability in the public sector.
 

Patricia Arriagada,
former acting Comptroller General
of Chile

These reforms were driven by the Comptroller General office, is what is known as a “Supreme Audit Institution,” and is responsible for monitoring revenues and expenditures in all parts of the government – in particular, ensuring the quality and credibility of financial management and financial reporting.

Invitation to apply for SAFE grants

Soukeyna Kane's picture
We're thrilled to share the news about our brand new Online Quarterly Bulletin, which features debt statistics news, trends, and events. Laid out in the format of an e-newsletter, this quarter's issue focuses on:
  • Debt statistics products, coverage, and methodologies
  • External debt trends of 2015
  • International debt statistics-related activities and summaries
One area we'd like to highlight is the interconnection of the many types of debt statistics that the World Bank collects, manages, and disseminates.
 
The World Bank collects annual external debt statistics through the World Bank Debt Reporting System (DRS) and publishes it annually in the International Debt Statistics (IDS) publication. This annual data is complemented by our quarterly external and public debt statistics captured through the Quarterly External Debt Statistics (QEDS) database and the Public Sector Debt (PSD) database.  To help illustrate this interconnection, we've created the below graphic.
 


 

A tool at the right time for tax reform

Jim Brumby's picture


In today’s world, international aid is fickle, financial flows unstable, and many donor countries are facing domestic economic crises themselves, driving them to apply resources inward. In this environment, developing countries need inner strength. They need inner stability. And they deserve the right to chart their own futures.

This is within their grasp, and last week the launch of an unassuming-but-powerful tool marked an important step forward in this quiet independence movement. It’s called the TADAT, or Tax Administration Diagnostic Assessment Tool. At first glance, this tool may look inscrutable, technical, and disconnected from development. But listen. 

Toward more accountable public finance: budget transparency, participation, and oversight

Anjali Garg's picture
 Innovate4Climate Finance & Markets Week. Photo: World Bank / Simone D. McCourtie


What does public debt have to do with combatting climate change?
 
A few years ago, this would have seemed a strange question, as debt management and climate policy have traditionally been regarded as unrelated fields. But at a workshop at the annual Debt Management Forum in Vienna on May 22, 2017, debt managers from 50 developing countries discussed the role of emerging debt instruments such as green bonds and blue bonds, in raising capital for climate-friendly projects that range from reforestation to renewable energy.

While green and blue bonds resemble more traditional debt instruments in terms of structure and returns, they represent a novel approach to climate finance. Created just ten years ago, the total value of green bonds has grown at a spectacular pace, reaching US$82.6 billion in 2016. By the end of 2017, the total value of green bonds will likely exceed US$100 billion.

Financing for Development: World Bank's role in supporting tax and revenue mobilization reforms is critical

Rajul Awasthi's picture

Melissa Thomas, author of Govern like us, speaking at the World Bank recently raised a very interesting question: is our expectation that poor countries with limited resources can deliver high-quality governance unrealistic?

Can these countries provide the public goods and services that citizens demand and need, to be able to forge a strong social contract?

She compares the levels of revenue per capita in rich and poor countries and finds that in the poorest countries, levels of revenue per capita are so low that it would be years, or even decades, until they have enough to provide a decent level of public goods and services.

It is in that context that I thought of Sri Mulyani’s appeal during the Spring Meetings when she spoke of the need to clamp down on tax evasion and avoidance and boost the domestic resource mobilization (DRM) capacities of developing countries as a means of finding resources for financing development going forward.

Public Financial Management reforms - signals or real change?

Renaud Seligmann's picture
Also available in: Français

Results of the west African country’s presidential election were openly available in real time, fostering confidence in the fairness of the result

 
 A street vendor sells newspapers in Ouagadougou on 3 December following the election of Roch Marc Kabore to the presidency. Photograph: Issouf Sanogo/AFP/Getty Images 
 

Democratic elections in transitional states are never straightforward. With limited experience to draw on, finite resources and a lack of transparency, it’s not uncommon for rumours, tensions and civil unrest to overshadow the process and undermine faith in the results.

But by midday on Monday 30 November – the day after Burkina Faso’s presidential election – citizens had a reliable early indication of who would be their first elected head of state since the overthrow of strongman Blaise Compaoré last year.

The difference was clear. For the first time, the results of the count were made openly available in real time. The official election website showed live results by district for each presidential candidate, and which candidate was leading in each province.

Trust is vital at all times during an election process. But one of the most sensitive time periods, especially in transition states, is between the time of polls closing and the time the final results are announced. In other recent elections on the continent, there have been delays of up to four days, creating an environment ripe for the spread of rumours and suspicion.

Apply for SAFE Trust Fund grants

Soukeyna Kane's picture



The SAFE Trust Fund application (Word document) is now open until 27 February 2015.
 
What is SAFE?
 
SAFE means Strengthening Accountability and the Fiduciary Environment. It is a Trust Fund group administered by the World Bank and established by the Swiss State Secretariat for Economic Affairs (SECO) and the European Commission with the aim of improving public financial management in the Europe and Central Asia region. This Trust Fund group provides support for activities to assess public financial management (PFM) performance, identify and implement actions to achieve improvements and share knowledge and good practices across countries in the region.

Meet your new friend, the finance minister

Philipp Krause's picture

Что способствует бездействию на рынке труда? Чистая макроэкономика и условия на рынке труда?

Хотя эти факторы и играют неоспоримую роль, индивидуальные обстоятельства также важны.

Рассмотрим два примера:

Эмили, 42 года, Ирландия - мать двоих детей. Хотя она и получила степень бакалавра 20 лет назад, она не работала с момента рождения своего первого ребенка, а ее муж обеспечивал достаточный доход для всей семьи.


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