Taxation and Investment in a 3rd World Economy : A First World Approach

In the second half of the twentieth century, the emergence of scores of new states has made international politics and economics truly global for the first time in history. At the same time, technology has made it possible for nearly every country to participate in events in every part of the world as they occur. Unfortunately, the explosion has not been accompanied by similar increase in knowledge. The continents interact but they do not learn from each other. The uniformity in technology, access to information, is accompanied by an implicit assumption that nations, both developed and developing world learn from each other, to fast-track growth and boost the economy. Countries differ in their economic success because of their different institutions, the rules influencing how the economy writes, and the incentives that motivates people. Inclusive economic institutions, such as those in South Korea or in the United States, allow and encourage participation by the great mass of people in economic activities that make best use of their talents and skills and that enable individuals make the choices they wish. To be inclusive, economic institution must feature secure pirate property an unbiased system of law, and a provision of public services that provides a level playing field in which people can exchange and contract; it also permits the entry of new business and allow people to choose their careers. No country no matter how ingenious can thrive on a mono-economy and avoid economic volatility. There must exist a paradigm shift from a mono-economy to diversification of the economy. This will culminate into economic growth thereby creating employment, infrastructural development, increase in standard of living, improved GDP and composite IGRs, and solve myriads of problems on the economic front. Taxation as a socio-economic tool could be used to achieve these aims via tax holidays, tax incentives, law tax tariffs, widening the tax base to include informal sectors thereby making these nations attractive to investors