Tax assignment: does the practice match the theory?
This paper builds on the existing literature to better explain the tax assignment choices made by countries in different economic circumstances. In particular, we explain why the degree of tax autonomy given to subnational governments is significantly greater in industrial than in developing countries, even when adjustment is made for differences in income level. We consider several arguments for this disparity. First, electoral regimes are not in place for the accountability gains to be fully captured. Second, tax decentralization may result in unacceptable fiscal disparities, and, third, tax administration costs are higher for subnational governments and there is not enough incentive to take steps to lower them. Finally, and contrary to expectations, we do not find empirical evidence that giving more discretionary powers to subnational governments in developing countries will lead to a crowding out of central revenues, but we do find this result for industrial countries.
Year of publication: |
2011
|
---|---|
Authors: | Bahl, Roy ; Cyan, Musharraf |
Published in: |
Environment and Planning C: Government and Policy. - Pion Ltd, London, ISSN 1472-3425. - Vol. 29.2011, 2, p. 264-280
|
Publisher: |
Pion Ltd, London |
Saved in:
freely available
Saved in favorites
Similar items by person
-
Taxation and development : the weakest link? ; essays in honor of Roy Bahl
Bird, Richard M., (2014)
-
Pakistan : provincial government taxation
Bahl, Roy W., (2008)
-
The challenge of intergovernmental fiscal relations in Pakistan : the property tax dimension
Bahl, Roy W., (2008)
- More ...