Political Institutions State Building And Tax Capacity
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Political Institutions, State Building, and Tax Capacity
Author | : Vitor Gaspar |
Publisher | : International Monetary Fund |
Total Pages | : 33 |
Release | : 2016-12-02 |
Genre | : Business & Economics |
ISBN | : 1475558163 |
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An empirical finding by Gaspar, Jaramillo and Wingender (2016) shows that once countries cross a tax-to-GDP threshold of around 123⁄4 percent, real GDP per capita increases sharply and in a sustained manner over the following decade. In this paper, we attempt via four case studies—Spain, China, Colombia, and Nigeria—to illustrate that the improvements in tax capacity have been part of a deeper process of state capacity building. We discuss the political conditions that supported tax capacity building, highlighting three important political ingredients: constitutive institutions, inclusive politics and credible leadership.