Squeezing the State: Tariff Revenue, State Capacity and the WTO's Doha Round

Abstract

BWPI Working Paper 169Creating and sharing knowledge to help end poverty www.manchester.ac.uk/bwpi Abstract Tax revenue forms a critical element of state capacity, in turn underpinning the state's ability to foster inclusive economic growth. This paper calculates the impact of the WTO's Doha Round on tariff revenues among low-income countries. It finds that some, though not all, are severely affected, losing up to 17 percent of total government tax revenue. In addition, the tariff cuts are found to be regressive, primarily affecting luxury items, such as motor vehicles. Finally, the paper analyses the effectiveness of the mechanism included in the Doha Round to overcome lost tariff revenue, namely aid for trade.

Opening the Black Box: The Contextual Drivers of Social Accountability

“…More broadly, international economic and political processes are understood to shape domestic accountability. They include, but are not limited to, (a) the level of a country's global economic integration, as more extreme forms of globalization can undermine accountability by limiting the state's capacity to debate and determine social and economic policy democratically (Rodrik 2011;Scott 2012); (b) international trade and financial flows (such as trade in illicit goods or money laundering), which can shape the incentives of political and economic elites to pursue anti-development practices; (c) international human rights norms, which can pressure certain states to open spaces for greater accountability; (d) international initiatives such as the Extractive Industries Transparency Initiative (see box 3.8)…”