In 2014, the Portuguese government appointed a Commission for Environmental Tax Reform that formulated a carbon-tax proposal designed to achieve three dividends: to help Portugal meet the European Union's target for emissions reductions by 2030, to boost long-term employment and GDP above their pre-carbon-tax levels, and to strengthen public finances by lowering public indebtedness. A key feature of this proposal was a judicious set of mixed strategies to recycle all carbon-tax revenues back into the economy. In this note, we show how the carbon tax that the Portuguese Parliament eventually approved deviated from such guidelines, and ultimately failed to achieve the triple dividend. We argue that authorities need to quickly amend the existing legislation to avoid this misguided attempt turning into a missedopportunityto improve environmental, macroeconomic, and fiscal outcomes.

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The national metrology, standards and conformity assessment system in Ukraine is still largely based on the state-controlled Soviet system and differ significantly in form and function from the national standards and conformity assessment systems (or the national quality infrastructure) found in countries of the European Union and of the OECD. While in the latter group of countries the vast majority of national standards are of a voluntary nature and the national quality infrastructure operates as a highly-decentralized network of public and private institutions, the Ukrainian model emphasizes technical regulations (or mandatory standards) and is dominated by highly-centralized government institutions. Recent accession of Ukraine into WTO and commitment for integration into the European Union (EU) motivated an assessment of its national quality infrastructure (metrology, standards and conformity assessment). The importance of metrology and metrology policy development is discussed to support the regulatory environment. The paper discusses main findings of the assessment developed in cooperation between the World Bank and the IFC Ukraine Business Enabling Environment Project.

Purpose The purpose of this paper, on Portugal, is to determine the economic effects of public and private capital spending on health. Design/methodology/approach The authors use a vector autoregressive model to estimate the elasticities and marginal products of health care investments in Portugal on investment, employment and output. Findings Every €1m invested in health care yields significant positive spillover effects, boosting investment and GDP by €24.74 and €20.45m, respectively, creating 188 net jobs. Adversely, net exports deteriorate, as new capital goods are imported. While only 28.2 percent of the total accumulated increase in GDP occurs within a year, investment is front loaded with a corresponding 73.8 percent. Over this period, 68 workers are displaced for every €1m invested. At a disaggregated level, real estate, construction, and transportation and storage are industries where output shares increase the most. Employment shares increase the most in professional services, construction and basic metals. Research limitations/implications This paper adds to the empirical literature, corroborating, for example, Rivera and Currais (1999a) and McDonald and Roberts (2002) in that health care spending can have a very significant effect on macroeconomic aggregates. In addition to the analysis of the tradable/non-tradable divide, it adds two further novelties by discussing industry-specific effects on economic performance and the distinction between effects on impact and those over the longer term. Practical implications As policy implications, health investments have very significant long-term economic performance effects, but are unhelpful counter cyclically. Also, they will change the industry mix: construction and professional services are the non-traded industries that will benefit the most, while the traded industries of non-metallic minerals, basic metals, and machinery and equipment benefit much less. Social implications Given that capital spending on health boosts economic performance, especially in the long run, it ought to be a part of Portugal’s medium-to-long-term growth strategy. Also, if these projects depress economic activity in the short run, and are thus unhelpful counter cyclically, the timing of when they are launched matters. Furthermore, following a health investment, policies that boost net exports will be required to ensure trade balance. Originality/value The originality of this paper is to estimate, in a dynamic framework, the aggregate and industry-specific elasticities and marginal products on investment, employment and output, allowing the identification of effects both on impact and over the long term. Although health care investments are expected to have important macroeconomic effects, they need not be evenly distributed across industries.

The authors use an endogenous growth dynamic general-equilibrium model, which accommodates the institutional constraints of the Stability and Growth Pact, to study tax reform in Portugal. Simulation results suggest that tax cuts financed in a nondistortionary way increase long-term GDP; i.e., they are efficiency improving, but do not always increase welfare. The tradeoff between efficiency and welfare is alleviated when reductions in public spending or increased public indebtedness finance the tax cuts. Since these mechanisms are not realistic under the institutional setting of the Stability and Growth Pact, tax reform in Portugal must involve trading off distortionary tax margins. In this case, the best strategy to increase both efficiency and welfare is to increase investment tax credits and finance them either through personal income taxes or through employers' social security contributions. . We thank Fernando Chau, Emanuel Santos, and two anonymous referees for helpful comments and suggestions, and Luíza Mello and Hélder Reis for their assistance. The opinions in this article do not necessarily reflect the views of the Portuguese Ministry of Finance. The usual disclaimers apply.The dynamic general-equilibrium model in this paper brings together two important strands of the taxation literature. On one hand, it follows in the footsteps of the computable general-equilibrium modeling in the tradition . It shares with this literature the ability to consider the tax system in great detail and to analyze the effects of large and simultaneous changes in the tax parameters. On the other hand, the model incorporates many of the insights of the endogenous growth literature in the tradition of among many others. In particular, it recognizes that tax policy has the potential for affecting the fundamentals of long-term growth and not just for generating temporary level effects.The simulations in this paper are organized in a sequence of three sets of experiments. In the first set of experiments, the tax rates at the major tax margins are reduced and the foregone tax revenues are offset by increases in lump-sum taxation. The use of lump-sum replacements is an interesting exercise in that it allows us to identify in a clear-cut manner the magnitude of the distortionary effects induced at the different tax margins. It also allows us to highlight the mechanisms through which economic performance is affected by changes at the different tax margins.Clearly, financing tax reductions through lump-sum tax replacements, while a useful exercise, is not a realistic one from the perspective of tax reform. This is because lumpsum taxation is either not available or would only be so at prohibitive social costs. Accordingly, in the second set of experiments, the reductions at the major tax margins are financed by more conventional instruments, namely, by reductions in current public spending and increases in public indebtedness.Under the current institutional constraints, however, these alternative financing mechanisms are not realistic ...