The Theory of Taxation for Developing Countries

Tax policy has far-reaching implications for economic development and public administration. This book, which presents a modern theory of public finance, brings together many of the most distinguished economists who have written on the subject. They provide coherent principles for tax design and a systematic framework for the analysis of practical questions of tax reform and pricing policy in developing countries. The book is especially timely as countries experience increasing shortages of government revenue and the distortions brought about by poorly designed tax systems. It pays particular attention to the special problems of developing countries, such as the taxation of agriculture. The aim throughout is to develop techniques that can be quantitatively applied given the data available, and empirical case studies illustrate the methods in action. The authors analyze the links between tax theory, social cost-benefit analysis, and the pricing of publicly supplied goods and services. They also explore the empirical and econometric problems of identifying the tradeoffs between equity and efficiency. Other topics treated include the analysis of labor markets, the taxation of foreign private investment and of fuel, and the pricing of education. Although the models used concentrate on developing countries, most of the methods and discussion apply as well to the problems of more affluent countries.