Fiscal reform

Relations between Latin America and Asia—by Asia in this case we refer to that broad swath of the Asian land mass that goes from East Asia through Southeast Asia all the way to South Asia—are undergoing a very special moment. It is precisely at moments like this that systematic reflection and analysis about the future course and direction of these links needs to happen. Much work has been done on Sino-LAC relations; some (particularly in previous decades) on the long-standing ties between Japan and the region; and Indo-LAC links are only now starting to trigger some interest. But broader reflections on the direction, pace, and quality of Asia-LAC links remain relatively few and far between.

The purpose of this volume, designed as the first part of a broader project, is to help fill this void and initiate a wide-ranging discussion about the current course of these ties: whether they should be nudged in one direction or another; what to make of present economic opportunities, and what the implications of the latter are for Latin America’s long-term development goals. Starting from current economic trends, its goal is to explore the implications of existing trade and investment patterns in Asia-LAC links. We have selected some of the most important cases in the region, but by no means all of them. Missing from this volume are significant players such as Venezuela, Ecuador, Cuba, and Costa Rica, among others, including the small states of the Caribbean. We hope to include them in future stages.

Among the questions we consider are the following: What can be done to mitigate, if not totally avoid, the “de-industrializing” effects of the demand for Latin American natural resources coming from Asia? What is the significance, if any, of the fact that trade between the two regions is largely intersectoral, with Latin America exporting mostly commodities to Asia and Asia in turn selling mostly industrial and consumer products, including many high-tech ones, to Latin America? What can Latin American countries do to get into the Asian value-added chains of production? Given that since 2003, an average of 2.3 regional trade agreements (RTAs) per year have been signed between countries of these two regions, are further FTAs and RTAs between Asia and LAC countries, like the ones between Chile and China, India and South Korea, or the one between MERCOSUR and India, the way forward? Is Taiwan still a relevant actor or have countries that have historically maintained diplomatic relations with it been seduced by the opportunities that China represents, thus leaving Taiwan behind? Are Argentina’s measures to limit foreign ownership of agricultural land a harbinger of things to come, as Asian companies move into South America? And, without downplaying China’s unmistakable role in South America’s recent prosperity, what are the sources of conflict and friction and how can they best be addressed?

This paper examines the concept of fiscal federalism in Nigeria, its legal framework, its historical evolution, the political economy, issues and challenges and the options for reform. It will posit that fiscal federalism is a particular pattern of constitutional division of revenue powers and responsibilities among levels of government. The dynamism and complexity of Nigeria’s federalism has attracted academic scrutiny. This is because it has generated so many problems capable of threatening the corporate existence and continuity of the Nigerian state.  The federal government has occupied a very strong position vis-à-vis the State and Local government since the 1970’s in Nigeria. Most of the power (financial and legislative) relating to economic development has been explicitly centralized at the federal level. The true practice of fiscal federalism in Nigeria has been inhibited by several factors which include, the dominance of the federal government in the sharing of national financial resources from the Federation Account, the imposition of the command structure of the military on fiscal federalism, the pattern of assignment of responsibilities by the constitution among federating units, and over-reliance on the revenue from the Federation Account.
No doubts, fiscal federalism is unarguably a potent economic strategy that can be used to maximize provision of public services as well promote macroeconomic stability. Central to the success of fiscal decentralization, is clarity in revenue and expenditure authority and responsibilities. This paper traces the historical evolution of Nigeria’s fiscal federalism, the legal framework inherent, the issues and challenges of fiscal federalism in Nigeria, and alternatives for remediation.
This paper will adopt an evaluative and assessment method, with the use of secondary data to explain the lingering controversies that underlie fiscal federalism and the challenge of both human and infrastructural development in Nigeria. The methods attempted to unveil the various revenue principles such as the principle of derivation, equality of states and demographic strength in Nigerian federal system. In using these methods, the various politics and agitations for the review of fiscal formula for even development of all states could be appreciated. However, it should be borne in mind that within the limited scope of this paper, all the principles of fiscal federalism may not be fully captured and explored, but these can help in the analysis and explanation of fiscal federalism especially as it relates to national development.
Finally, this paper will posit the various options necessary for reform

Due to the deteriorating fiscal situation of the states, the Government of India has taken several initiatives, including the creation of a Fiscal Reform Facility, which sought to provide financial-grant incentives to the states, in order to encourage a movement toward budget balance over the five year period coinciding with the implementation period of the Eleventh Finance Commission (2000-2005). The

Over the course of more than a generation of vibrant and mostly uninterrupted electoral democracy, Latin American governments have done almost nothing about the fact that the region suffers from the highest levels of inequality, on average, in the world. On the spending side, what little has been done has been quite innovative, and this has brought new attention to redistribution through programs such as conditional cash transfers and universal noncontributory pensions, which have been credited by some with a small but measurable improvement in equality in several countries since about 2000. But taxation across the region is still generally regressive, relying greatly on revenue from consumption taxes and (with a handful of minor exceptions) hardly at all on revenue from personal income taxes. The long coexistence in the region of elected governments, enormous inequality, and inattention to progressive taxation ought to puzzle us—and not just because it directly violates the expectations of the most widely cited model of the political economy of taxation.

However, more recently, and especially since the Uruguayan tax reform of 2006, some policymakers have in fact begun to consider what might be done on the revenue side of the ledger to address inequality. The Chilean tax reform of 2014 is the best example. Still, progressive tax
measures have faced a variety of obstacles, as we discuss in more detail
below, including the doubts of some experts and practitioners about their effectiveness or political feasibility. Hence the questions: What kinds of reforms would be economically efficient, effective at redistribution, and politically possible? And what conditions and strategies might be most conducive to such reforms?

This book seeks to answer these questions, in pursuit of two objectives. The first is to update the literature on tax reform in Latin America by focusing on how progressive tax reforms take place, with special reference to important recent examples of success and failure in this regard. The second is to glean advice for reformers, drawn from the same literature and examples, emphasizing factors that are within the control of policymakers. The literature on tax reform in the region has produced a large volume of work on the optimal design of reform from an economic and administrative standpoint. But much less has been done on the determinants of reform, especially on the success or failure of progressive tax initiatives.

This article considers some of the effects of health sector reform on human resources for health (HRH) in developing countries and countries in transition by examining the effect of fiscal reform and the introduction of decentralisation and market mechanisms to the health sector.Fiscal reform results in pressure to measure the staff outputs of the health sector. Financial decentralisation often leads to hospitals becoming "corporatised" institutions, operating with business principles but remaining in the public sector. The introduction of market mechanisms often involves the formation of an internal market within the health sector and market testing of different functions with the private sector. This has immediate implications for the employment of health workers in the public sector, because the public sector may reduce its workforce if services are purchased from other sectors or may introduce more short-term and temporary employment contracts.Decentralisation of budge...

The search for solutions to urban and social problems prompted by informal settlements is gaining importance in the development agenda of most large cities in Latin America. Nearly 60 percent of the population lives in informal, often centrally located settlements.

Markets and government planning are providing alternative systems for coordinating people’s consumption of resources. The effectiveness of coordination depends on the capability of each system to signify accurate information about people’s wants and available supplies of resources. And on the incentives each provides for individuals to react to the desire of others [Hayek (1945) and Wills (2007)]. Natural resources generate public revenues and benefits. Its equitable distribution and sustainable production leads to real development and ultimately helped to poverty reduction and alleviation. Therefore, natural resource revenues necessitate distributions that favour the needs of the indigenous poor people and local sustainable development. Productive and high-value natural resources are seldom accessible to all citizens and their benefits are rarely evenly dispersed crosswise peoples and geographically across nations. It is worth mentioning that revenues collected from natural resourc...

In May 2000, the Latin American Program and Yale University held a conference to assess the profound transformations underway in Mexico and in U.S.-Mexico relations. This volume offers several of the presentations from this conference which address three areas of concern: political and social transition in Mexico; new directions in economic policy; and the changing nature of U.S.-Mexico relations.

This paper tackles the issue of international fiscal coordination in a world of integrated markets sovereign national governments. Taxation of mobile capital and immobile labor in order to finance a public good generates inefficient fiscal competition. Two fiscal reforms are considered: a minimum capital tax level and a tax range, i.e., a minimum plus a maximum capital tax level. We

Right after Romania’s change in regime in December 1989, profound changes in the structure and functioning of government and the economy started to take place. Since the early 1990s the decentralization of the public sector has been an important policy initiative in the process of transition to a market economy and a democratic society. The impetus for decentralization policy has gained considerable momentum in recent times.

Medium Term Fiscal Frameworks (MTFs) have become one of the most popular reforms to the budgetary process in Latin America during the last decade, and introducing MTFs seemed to be the magic solution for most fiscal ailments. Nonetheless, there has been no comprehensive evaluation of their impact. This document discusses the normative merits of using MTFs, provides a characterization of

This paper addresses the question of whether the European Monetary System can be copied outside Europe. Our answer is negative. The EMS is just one element of a more comprehensive design of institutional integration within Europe: the presence of the European Economic Community, and the dependence of EEC institutions upon exchange rate stability lend credibility to EMS exchange rate targets in a way that would not be present. say, among the United States, Europe and Japan. The EMS has also reproduced previous experiences of fixed exchange rates by not imposing the exchange rate constraint symmetrically upon all member countries: the system has de facto worked as a DM-zone, thus confirming that the institution of fixed rates pg cannot induce international monetary cooperation. Finally, the differences in the use of the inflation tax among European countries and the divergent behavior of government debt after 1979 indicate that the pursuit of monetary convergence among countries with ...

© 2004 International Monetary Fund WP/04/98 IMF Working Paper Fiscal Affairs Department Toward More Effective Redistribution: Reform Options for Intergovernmental Transfers in China Prepared by Ehtisham Ahmad, Raju Singh, and Mario Fortuna1 June 2004 Abstract This ...

... In those unusual cases where a woman is working in the public sector, she tends to reside in households in the upper end of the urban income distribution. ... Evidence from Africa, however, generally does not support the widely accepted proposition that the poor Early ...

Is presenting a fiscal bonus as an income increase (a gain) the same as presenting it as a tax rebate (a loss reduction)? This paper aims to answer this question with two studies. Study 1 is a survey carried out in Italy to explore citizens' perceptions of a fiscal reform introduced in 2005. It shows both effects imputable to the methods used to describe the bonus and differences between respondents belonging to different occupational groups. But it does not allow disentangling these factors. Study 2 aims to investigate whether and how (1) the frame used to describe a fiscal bonus and (2) taxpayers' occupational status, influence their evaluation of this tax reduction and the uses they intend to make of it. To this end, 252 participants belonging to different occupational groups were submitted to two between-subject framing conditions (the bonus being described as a reduced loss or as a gain). They were then asked to evaluate the bonus' importance for their personal weal...

To finance basic pro-poor services, the Government of Ghana must mobilize more public revenue. But tax reform has been highly controversial in Ghana. An attempt to introduce VAT in 1995 failed after widespread protests. Although a second attempt to introduce VAT in ...

This article treats on the fiscal harmonization process within the European Union being indispensable for assuring loyalty in the competition on its single market, given the fact that different system of taxation had direct and powerful impact on the prices level and on chosing the location for production and distribution activities. Both direct and indirect taxation distort the four fundamental