Author ORCID Identifier
Roy Bahl: https://orcid.org/0000-0002-7956-5076
Document Type
Article
Publication Date
2011
Abstract
This paper builds on the existing literature to better explain the tax assignment choices made by countries in different economic circumstances. In particular, we explain why the degree of tax autonomy given to subnational governments is significantly greater in industrial than in developing countries, even when adjustment is made for differences in income level. We consider several arguments for this disparity. First, electoral regimes are not in place for the accountability gains to be fully captured. Second, tax decentralization may result in unacceptable fiscal disparities, and, third, tax administration costs are higher for subnational governments and there is not enough incentive to take steps to lower them. Finally, and contrary to expectations, we do not find empirical evidence that giving more discretionary powers to subnational governments in developing countries will lead to a crowding out of central revenues, but we do find this result for industrial countries.
DOI
https://doi.org/10.1068/c1045r
Recommended Citation
Bahl, R., & Cyan, M. (2011). Tax Assignment: Does the Practice Match the Theory? Environment and Planning C: Government and Policy, 29(2), 264–280. https://doi.org/10.1068/c1045r.
Comments
Originally published in Bahl, R., & Cyan, M. (2011). Tax Assignment: Does the Practice Match the Theory? Environment and Planning C: Government and Policy, 29(2), 264–280. https://doi.org/10.1068/c1045r.
(c) Sage. Posted by permission due to unavailability of author accepted manuscript.