This paper presents a rational political budget cycle model for an open economy, in which devaluations are delayed in the pre-election period so as to increase the electoral chances of the party in office. By concentrating on closed economies, previous political cycle models had overlooked the...

Tax expenditures are generally defined as those government expenditures carried out through tax legislation, regulations, and practices that reduce or defer taxes for some taxpayers. There is a general concern that the tax expenditures negatively affect the budget and tax policies, which in turn...

This paper addresses options for restructuring the revenue system of Bolivia's subnational governments, particularly prefectures, emphasizing reduction of dependence on natural resources and strengthening of subnational tax autonomy. The paper additionally identifies tax instruments or tax bases...

This paper explores the qualitative and quantitative implications of taxation for growth and savings in three Latin American countries: Brazil, Chile and Mexico, studying a small open economy in the context of an endogenous growth model where the domestic interest rate depends on the level of...

This paper surveys the system of sub-national own revenues and the inter- governmental transfer system (including the sharing of oil revenues) in Brazil, highlighting their critical flaws. The latter include heavy reliance on a mixed- origin/destination-based value-added tax and many...

This paper aims to provide an overview of the current state of taxation in the Latin America and Caribbean (LAC) region, and its main reform needs and options. It previews the findings of recent studies prepared or commissioned by the Inter-American Development Bank (IDB) for its forthcoming...

This paper analyzes the evolution and structure of taxation in the Mercosur countries. Specifically, it covers taxes on goods and services, including general excise taxes and excises taxes, and income taxes, both corporate and personal. It also discusses the role of the tax administration and...

This paper reviews developments in Europe from the eve of the introduction of the euro through the euro crisis. The paper begins with a discussion of the tax reform agenda. Although there are differences in the literature on specific taxes, and while European countries vary in their preferred...

This document discusses the effect of tax incentives on business activities and investment decisions. When taxation is not sound it hurts the business climate and hampers economic activities. Since the primary intent of tax incentives is to encourage capital accumulation in specific activities...

This working paper advances research on inequality with unique, new data on income distribution in 61 countries, including 20 Latin American countries, to explore the effects of political parties on redistribution. First, consistent with a central, but still contested, assumption of the...