Taxation and economic development : twelve critical studies

310 Pages·2013·14.578 MB·English

by  J F J Toye

Routledge Revivals
Taxation and Economic Development
The tax system is one of the instruments said to be available to trans-
late development policy objectives into practice. The wide-ranging
papers collected together in this volume, first published in 1978,
explore different aspects of the link between national development
objectives and the tax system. Attention is particularly focused on tra-
ditional aims such as growth, fair distribution and economic stabilisa-
tion and development. Articles written by distinguished experts in the
fields of public finance and economic development clarify the concepts
of taxable capacity and tax effort, and examine the connections between
growth and changes within the tax system.
This pagei ntentionallyl eft blank
Taxation and Economic
Development
Twelve Critical Studies
J. F. J. Toye
Routledge
Taylor & Francis Group
Firstpublishedin1978
byFrankCassandCompanyLimited
Thiseditionfirstpublishedin2013byRoutledge
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©1978JohnToye
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ALibraryofCongressrecordexistsunderLCcontrolnumber:79302871
ISBN13:978-0-415-83108-6(hbk)
ISBN13:978-0-203-49923-8(ebk)
TAXATION
AND
ECONOMIC
DEVELOPMENT
Edited by
J. F. J. TOYE
AssistantD irector of DevelopmentS tudies,
University of Cambridge.
FRANK CASS
First published1 978 in Great Britain by
FRANK CASS AND COMPANY LIMITED
GainsboroughH ouse, GainsboroughR oad,
London, Etl 1R S, England
and in the United Stateso f America by
FRANK CASS AND COMPANY LIMITED
c/o Biblio Distribution Center
81 Adams Drive, P.O. Box 327, Totowa, N.J. 07511
This collection Copyright © 1978 Frank Cass& Co. Ltd.
British Library Cataloguingi n Publication Data
Taxation and economicd evelopment.
1. Underdevelopeda reas-Taxation-Addresseess.s ays,
lectures2 . Underdevelopeda reas-Economic
conditions-Addressese,s says,l ectures
I. Toye. J F
336.2'0091724 HJ23SI
ISBN 978-0-7146-4028-0
All rights reserved.N o part oft his publiC'ation mayb e reproduC'ed
in anyf orm or by any meanse, lectronic.m echanicalp. hotocopying.
rerording or otherwise,w ithout the prior permis.tiono fF rank Cass
and CompanyL imited in writing.
Contents
Preface VII
Introduction: Taxation and Economic Development:
Answers and Questionsf rom Recent Research.
J. F. J. Toye 1
Part One: TAX CAPACITY AND TAX EFFORT
1. The TaxableC apacityo f a Country.
A. R. Prest 13
2. Assessing Tax Performance in Developing
Countries: a Critical Review of the Literature.
R. M. Bird 33
3. Tax Effort in Developing Countries:W hat do
RegressionM easuresR eally Measure?
B. R. Bolnick 62
Part Two: TAX REVENUE AND ECONOMIC GROWTH
4. Estimateso f Revenue Elasticity and Buoyancy in
Central America, 1955-1974.
D. SykesW ilford & W. T. Wilford 83
5. Exports, Taxesa nd Economic Growth: the Caseo f
EI Salvador.
L. R. Caceres 102
6. The Fiscal Crisis of the Latin American State.
E. V. K. FitzGerald 125
Vi CONTENTS
Part Three: EQUITY ASPECTSO F TAXATION
7. Income Tax Evasion and Income Distribution.
N. C~ Kakwani 161
8. Progressive Public Utility Rates as an Income
RedistributionD evice in Developing Countriest:h e
Caseo f Municipal Water.
M. T. Katzman 174
9. Transfer of Resourcesf rom Agriculture to Non-
agricultural activities: the Caseo f India.
M. Lipton 193
lO. Equity versusE asei n Indian Land Tax Policy.
J. F. J. Toye 222
Part Four: ECONOMIC EFFECTSO F TAXATION
11. Domestic Price Stabilisation of a Staple Export
Crop: an Evaluation of the Rice Premium Tax in
Thailand.
N. V. Lam 249
12. Fiscal Incentives for Firms in some Developing
Countries:S urvey and Critique.
S. M. S. Shah & J. F. J. Toye 269
Index 297
Preface
From the amount of bad academic economics that is
published,I hadu ntil recentlyc oncludedt hat no goodp ieceo f
work would have difficulty in reachingt he public. So I was
somewhata larmedt o discoverm yself, as oneo f the managing
editorso f the Journal ofD evelopmenSt tudies,w ith manym ore
good contributions awaiting publication than could be
publishedg iven the presents ize and frequencyo f the Journal.
This wasp articularlyu nfortunateb ecausefi ve of them were in
my own field of special interest, namely tax policy in
underdevelopedm ixed economies.M y first debto f gratitudei s
to the Journal'sp ublisher,F rank Cass,f or his readyr esponse
to my suggestiont hat thesep aperss hould form the core of a
volume of collected essayso n the subject of taxation and
economicd evelopment.
My secondd ebt is to thosec ontributorsw ho, when told of
this project, kindly offered me papersw hich would allow the
production of a volume that was reasonablyb alancedi n its
rangeo f topics, its geographicacl overagea nd its diversity of
intellectual styles.
My third debt is to the University of Cambridge'sO verseas
StudiesC ommittee,u nderw hosea uspicesm y own researches
into equity aspectso f Indian taxation have been conducted.
The Committeeh as materiallya ssistedm y own researcha nd
the preparationo f this volume, which is intended to be an
addition to available teachingm aterial for courseso n public
finance for overseasa dministrators.
Most of the essaysin this volume haven ot appearedin print
before. But acknowledgementis due to the publishers of
Finanzarchiv and Modern Asian Studies,a nd to their editors
Professor Norbert Andel and Dr Gordon Johnson, for
permissiont o republishC hapters2 and 10.
Various kinds of secretariala nd administrativea ssistance
have been provided by Corinne Benicka and Catherine
Thomas,a nd I wish to thank them both very much.
January,1 978 J. F. J. TOYE
vii