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The Political Economy of Tax Reform in Latin America : A Critical Review
| Content Provider | Semantic Scholar |
|---|---|
| Author | Santos, Saulo Ribeiro Dos |
| Copyright Year | 2013 |
| Abstract | Efforts to reform tax systems in Latin America may be assessed from many different perspectives. Studies that are restricted to technical, apolitical aspects of tax reform have failed to capture the reality of tax policymaking in many countries. A political economy perspective can better attend to the myriad political features of the tax reform process. The political economy literature itself is quite varied, with different methods, emphases, assumptions, and frameworks. This paper makes a critical survey of political economy literature on tax reform and its distributional effects in Latin American countries (LAC). Substantial work on tax reforms in Latin America has focused on tax harmonization, the tax gap, fiscal stabilization, and fiscal decentralization, among other issues (see Martner and Tromben 2004; von Haldenwang 2008; Jiménez et al. 2010, for a review of these approaches). In addition, the broad income inequality in the region places distributional issues at the center of tax reform processes, and some scholarship has examined the close links between taxation and inequality (e.g., Wibbels and Arce 2003; Zolt and Bird 2005; Sokoloff and Zolt 2006). Most studies, however, have not adequately engaged the question of why the progressivity of the tax systems has not changed significantly in the last decades in countries characterized by political fragmentation and clientelism. A technical, apolitical approach to the study of tax reform has inhibited a full understanding of the underlying political games and power plays that governments must engage as they seek to change tax structures and redistribute the tax burden in order to improve equality. By contrast, the political economy literature transcends the narrow logic and calculations of revenue-enhancing taxes and focuses instead on the interplay of political actors and institutions that produce given outcomes. Thus, a political economy perspective provides insight as to why the resulting tax structures reflect the political preferences that prevail over time. saulo sanTos De souza* WOODROW WILSON CENTER UPDATE ON THE AMERICAS FEBRUARY 2013 |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://www.wilsoncenter.org/sites/default/files/Political%20Economy%20of%20Tax%20Reform.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
