The authors contend that in evaluating and designing investment incentives in developing economies, analysts should consider their effect on: the marginal effective tax rate (METR). Even simple tax incentives can perversely affect the METR. Many schemes have relatively generous write-offs to...

For tax policy to encourage maximum investment of capital (both foreign and domestic) it is necessary to take into account the potential mobility of capital across international borders. Economic analysis of investment incentives should therefore incorporate the effects of variables such as...

In many countries, well-meant ad hoc tax incentives proliferate over time, creating an opaque corporate tax structure and many unanticipated tax loopholes. Tax authorities in several countries have considered and sometimes introduced minimum corporate taxes. Liability under such a tax is...

Over the 1980s and 1990s, GDP growth had stagnated because of oil export price volatility and natural disasters, the sacrifice of capital formation to heavy external public debt service, and incomplete and uneven structural reform. The exchange rate depreciation that proved continually necessary...

This paper reviews the literature and country experience on the macroeconomics of fiscal policy in low income Africa. Given the experience of the 70's and 80's, the ultimate focus of the discussion must be the interaction of fiscal policy with the challenges of stabilization and structural...

Despite decades of studies, tax incidence analyses for developing countries continue to be based on the same shifting assumptions used in developed country studies - despite obvious pitfalls. Taxes are assumed to be shifted forward to consumers or backward onto factor incomes. Developing...

Enthusiasts for financial sector tax reform typically come either with some form of"flat tax"(including value added tax on financial services, zero taxation on capital income, or a universal transactions tax) or advocating corrective taxes designed to offset market failures or achieve other...

The aim of this paper is to examine the implications for certain key macroeconomic variables in relation to reductions in public spending. In particular, the paper looks at; the rate of inflation, the interest rate, and the rate of growth of real GNP. The paper develops an intertemporal general...

There are many economic diagnostic tools available which are trying to identify the constraints to economic growth in a given country. Unfortunately these tools tend to provide inconclusive and often conflicting answers as to what the most important constraints are. Even more worrisome, they...

The tax holiday - an incentive frequently used in developing countries to encourage capital investments - offers benefits for short-term investments but could in fact penalize long-term capital investments. For some countries with high inflation rates and relatively fast writeoffs for...