Political Institutions, State Building, and Tax Capacity: Crossing the Tipping Point
IMF Working Papers, December 2, 2016
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- Political Institutions, State Building, and Tax Capacity: Crossing the Tipping Point
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Bibliographic details
- Authors: Vitor Gaspar, Laura Jaramillo, Philippe Wingender
- Published: December 2, 2016
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9781475558142.001
Key findings
- An empirical finding by Gaspar, Jaramillo and Wingender (2016) shows that once countries cross a tax-to-GDP threshold of around 12¾ percent, real GDP per capita increases sharply and in a sustained manner over the following decade.
- Improvements in tax capacity are illustrated as part of a deeper process of state capacity building through four case studies: Spain, China, Colombia, and Nigeria.
- The paper highlights three important political ingredients that supported tax capacity building: constitutive institutions, inclusive politics and credible leadership.
Case studies and evidence
- Four country case studies used to illustrate mechanisms linking tax capacity and state capacity:
- Spain
- China
- Colombia
- Nigeria
Political conditions that support tax capacity building
- Constitutive institutions
- Inclusive politics
- Credible leadership
Subject coverage and keywords
- Subject: Fiscal policy, Revenue administration, Subnational tax, Tax administration core functions, Tax return filing compliance, Taxes
- Keywords: development, Global, government activity, income per capita, income tax, institutions, Lagos State government, political economy, progressive tax, real GDP, State revenue staff, Subnational tax, Tax administration core functions, tax capacity, tax reform, Tax return filing compliance, tax threshold, taxation, UDC government, WP
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- Political Institutions, State Building and Tax Capacity: Crossing the Tipping Point