Tax system reform in Latin America: Domestic and international causes

Sánchez, Omar

doi:10.1080/09692290600950654

Cited by 36 publications

(21 citation statements)

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“…This is a focus on conditionality. Sánchez (2006) argues that IMF involvement was more important in the 1980s and 1990s as governments needed international loans to deal with problems in their external accounts, and he cites Bird (1992), who comments that "explicit tax changes" occur only "when the International Monetary Fund really puts on the pressure." 21 The IMF has also historically been a big backer of reforms that lead to more efficient tax systems even when there is no explicit conditionality.…”

Section: Empirical Model and Datamentioning

confidence: 99%

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Hallerberg¹,

Scartascini²

2015

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC-IGO license. Terms of use: Documents inFollowing a peer review process, and with previous written consent by the Inter-American Development Bank (IDB), a revised version of this work may also be reproduced in any academic journal, including those indexed by the American Economic Association's EconLit, provided that the IDB is credited and that the author(s) receive no income from the publication. Therefore, the restriction to receive income from such publication shall only extend to the publication's author(s). With regard to such restriction, in case of any inconsistency between the Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives license and these statements, the latter shall prevail.Note that link provided above includes additional terms and conditions of the license.The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent.http://www.iadb.org 2015 1 Abstract * This paper examines whether elections, which are generally held on fixed dates, and banking crises explain the timing of tax reforms and the allocation of the additional tax burden. Using an original fine-grained dataset of tax reforms, the paper finds support for the role of these two sources of variation. In particular, the probability of reform is higher during banking crises. During electoral periods, increasing taxes becomes highly unlikely, even if the government is facing financing problems. Interestingly, politics seem to trump economics: banking crises do not affect the probability of having a reform during electoral times. Moreover, the presence of an IMF program affects the tax instruments chosen: countries with a program increase the value-added tax, while those without raise the personal income tax. Finally, the ideology of the president does not explain who bears the additional tax burden. JEL classifications: F41, H2

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Section: Empirical Model and Datamentioning

confidence: 99%

Explaining Changes in Tax Burdens in Latin America: Does Politics Trump Economics?

Hallerberg¹,

Scartascini²

2015

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“…While this indicator should be exploited in the profession for understanding where the region is heading in terms of certain features of policies, it does not provide a comprehensive-and value free-picture of tax reforms in the region. 5 Sánchez (2006) also explores tax reforms in Latin America, emphasizing the role of external pressures, IMF programs and debt crises in the process. He argues that lower administrative capacity and pragmatic needs for resources are domestic factors that must not be overlooked and that can trump external pressures.…”

Section: Tax Reforms In Latin American Countriesmentioning

confidence: 99%

Tax Reforms in Latin America in an Era of Democracy

2013

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The opinions expressed in this publication are those of the authors and do not necessarily reflect the views of the Inter-American Development Bank, its Board of Directors, or the countries they represent. Terms of use: Documents inThe unauthorized commercial use of Bank documents is prohibited and may be punishable under the Bank's policies and/or applicable laws.Copyright © Inter-American Development Bank. This working paper may be reproduced for any non-commercial purpose. It may also be reproduced in any academic journal indexed by the American Economic Association's EconLit, with previous consent by the Inter-American Development Bank (IDB), provided that the IDB is credited and that the author(s) receive no income from the publication. The literature on taxes and public finance generally focuses on revenues, an easily observable and generally available variable, as the observable measure of tax policy. Still, revenues depend on many determinants other than the political will and policy objectives of the government. It is therefore important, when studying the politics of taxation, to evaluate specific changes to the tax code such as rates, bases and exemptions. With the underlying goal of exploring the political process and the determinants of tax policy, this paper compiles a novel and highly comprehensive database of tax reforms for Latin America between 1990 and 2004. The paper presents a description of the database as well as the stylized facts of tax reforms in Latin America. Examples of the database's uses are discussed, as is motivation for future research. Cataloging-in-Publication

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“…While there have been no comprehensive and systematic assessments of the success of these reform programmes, 8 this global reform agenda has enjoyed a relatively high degree of at least superficial success, as reflected in significant convergence in the features of developing country tax systems (Fjeldstad and Moore 2008, Sanchez 2006, IMF 2011. Keen (forthcoming) suggests that shared reform trajectories have often been driven by 'big ideas' which have shaped reform objectives across the developing world.…”

Section: Reform and Convergence In The Developing Worldmentioning

confidence: 99%

“… Third, tax reform is more likely during periods of fiscal crisis or political transition, as during such periods elite support for reform may crystalise and resistance is more likely to be fragmented (Ascher 1989, Bates 1989, Thirsk 1997, Lieberman 2002, Mahon 2004, Sanchez 2006.…”

mentioning

confidence: 99%

“…Despite the absence of systematic research, there is certainly anecdotal and some cross-country evidence that in a wide range of countries pressure from donors has helped to advance tax reform efforts (Prichard 2010b, van Soest 2007a. 27 Broadly, the dramatic convergence of developing country tax policies over time is suggestive of some success for conditionality (Sanchez 2006). More specifically, Mahon (2004) finds that tax reform programmes are more common, and more frequently successful in changing tax policy, in countries that have signed agreements with the IMF.…”

mentioning

confidence: 99%

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