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11. Fighting deepens around El Fasher in Sudan, al-Shabaab loses territory in Somalia, and police crack down on tax-related protests in Kenya

Author:
Armed Conflict Location & Event Data Project (ACLED)
Publication Date:
06-2024
Content Type:
Commentary and Analysis
Institution:
Armed Conflict Location & Event Data Project (ACLED)
Abstract:
A new major battle broke out in the North Darfur city of El Fasher, which has been surrounded since April by the Rapid Support Forces (RSF). El Fasher is the only capital city in Darfur that is still controlled by the Sudanese Armed Forces (SAF). The SAF, backed by its allies, managed to conduct multiple offensive maneuvers on RSF strongholds in rural territories in North Darfur. During the clashes, the SAF claimed to have inflicted several casualties on the RSF, including killing the local operation commander. ACLED records at least 700 reported fatalities in connection with fighting around the city since the RSF began the attack on El Fasher on 10 April; around half of them — 320 — were recorded during the reporting period, 25 May to 21 June. Additionally, the violence has heavily hit health care facilities in North Darfur, causing them to go out of service and aggravating an already dire humanitarian situation. According to the Sudan Doctors’ Union, at least 4,000 people may have died from violence, diseases, and starvation in El Fasher alone.
Topic:
Civil War, Protests, Tax Systems, and Armed Conflict
Political Geography:
Kenya, Africa, and Sudan

12. Raindrop in the drought? Vulnerability to climate shocks and the role of social protection in Zambia

Author:
Katrin Gasior, Pia Rattenhuber, Adnan Shahir, and Anna Zasova
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
Zambia’s reliance on rain-fed agriculture makes its economy and population highly vulnerable to frequent droughts and irregular rainfall. This paper assesses the role of social protection, specifically the Social Cash Transfer (SCT) program, in mitigating drought-induced poverty and consumption declines. Using the MicroZAMOD microsimulation model and districtlevel rainfall data, we find that rainfall shocks significantly increase poverty and reduce household consumption, disproportionately affecting the poorest households. While the current SCT program provides some relief, reforms to eligibility criteria, particularly removing the household composition requirement, could improve targeting, expand coverage, and strengthen resilience against climate-related economic shocks.
Topic:
Agriculture, Climate Change, Tax Systems, Vulnerability, and Social Protection
Political Geography:
Africa and Zambia

13. Tax financing options for new social protection instruments: The equity implications of taxing more to expand the South African social security system

Author:
Maya Goldman and Ntuthuko Hlela
Publication Date:
09-2024
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
In this paper, we use a static fiscal incidence analysis model to evaluate the poverty and inequality impacts of using fiscal policy to finance expanded social spending in South Africa. We assess three methods to enhance the social protection system’s equity objectives: increasing the size and/or coverage of the existing Social Relief of Distress grant and introducing a universal or working-age basic income grant. The implications of financing these reforms are examined using four tax instruments: increasing the value-added tax rate, increasing personal income tax rates, reducing the personal income tax primary annual rebate, and introducing a surcharge on incomes. While we discuss behavioural effects, they are not included in the model. Our analysis indicates that an expansion of the social security system financed through increased taxation could substantially reduce poverty and inequality to varying degrees depending on the taxes and transfers used.
Topic:
Poverty, Inequality, Tax Systems, Fiscal Policy, Social Spending, and Cash Transfers
Political Geography:
Africa and South Africa

14. The Commitment to Reducing Inequality Index 2024

Author:
Anthony Kamande, Jo Walker, Martin Matthew, and Max Lawson
Publication Date:
10-2024
Content Type:
Special Report
Institution:
Oxfam Publishing
Abstract:
Now in its fifth edition, the Commitment to Reducing Inequality Index (CRI) assesses the commitment of 164 countries and regions to fighting inequality. The CRI 2024 offers powerful new evidence on whether governments are acting to reduce inequality through policies on public services, fair taxation and labour rights. It reveals negative trends in the vast majority of countries since 2022. Four in five have cut the share of their budgets going to education, health and/or social protection; four in five have backtracked on progressive taxation; and nine in ten have regressed on labour rights and minimum wages. Nine out of ten countries have backtracked in one or more area, meaning without urgent policy actions to reverse this worrying trend, economic inequality will almost certainly continue to rise in 90% of countries. Despite some progress, the IMF and the World Bank could do far more to prioritize the fight to reduce inequality. This report assesses their actions across the three CRI pillars of public services, taxation and labour rights. It makes recommendations for how the IMF and World Bank should stop promoting policies that increase inequality and instead support those policies that reduce it, as a matter of urgency.
Topic:
Inequality, Tax Systems, Public Service, Wages, Jobs, and Social Protection
Political Geography:
Global Focus

15. Design of Partial Population Experiments with an Application to Spillovers in Tax Compliance

Author:
Guillermo Cruces, Dario Tortarolo, and Gonzalo Vazquez-Bare
Publication Date:
12-2024
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
We develop a framework to analyze partial population experiments, a generalization of the cluster experimental design where clusters are assigned to different treatment intensities. Our framework allows for heterogeneity in cluster sizes and outcome distributions. We study the large-sample behavior of OLS estimators and cluster-robust variance estimators and show that (i) ignoring cluster heterogeneity may result in severely underpowered experiments and (ii) the cluster-robust variance estimator may be upward-biased when clusters are heterogeneous. We derive formulas for power, minimum detectable effects, and optimal cluster assignment probabilities. All our results apply to cluster experiments, a particular case of our framework. We set up a potential outcomes framework to interpret the OLS estimands as causal effects. We implement our methods in a large-scale experiment to estimate the direct and spillover effects of a communication campaign on property tax compliance. We find an increase in tax compliance among individuals directly targeted with our mailing, as well as compliance spillovers on untreated individuals in clusters with a high proportion of treated taxpayers.
Topic:
Tax Systems, Randomized Controlled Trials, Compliance, Spillovers, Cluster Experiments, and Two-Stage Designs
Political Geography:
Global Focus

16. The state of the UK economy 2024

Author:
UK in a Changing Europe
Publication Date:
01-2024
Content Type:
Special Report
Institution:
UK in a Changing Europe, King's College London
Abstract:
The state of the UK economy is always an important matter, but it is all the more so in what looks likely to be an election year. This UK in a Changing Europe report takes stock of the UK economy in order to assess how it can break from the current economic and political ‘doom loop’. The report provides a constructive framework to address the need for a longer-term, joined up approach in policy areas, ranging from education to immigration, to public services and artificial intelligence. It shows that there is no single silver bullet for the problems facing the UK economy, however a number of themes have emerged. The UK has long been plagued by short-termism and political instability which needs to be addressed. Edited by Senior Fellow Professor Jonathan Portes, it brings together leading UK academics on the economy from universities across the UK, the Migration Observatory, the Institute for Fiscal Studies and other research institutions.
Topic:
Education, Industrial Policy, Migration, Economy, Tax Systems, Macroeconomics, Trade, Artificial Intelligence, Housing, Labor Market, Public Service, Productivity, and Net Zero
Political Geography:
United Kingdom and Europe

17. Tax Expenditures in OECD Countries: Findings from the Global Tax Expenditures Database

Author:
Martin Beznoska
Publication Date:
01-2023
Content Type:
Working Paper
Institution:
German Institute of Development and Sustainability (IDOS)
Abstract:
The Global Tax Expenditures Database (https://GTED.net/) collects national reports on tax expenditures for 101 countries for the period from 1990 to the present. Based on these data, the development of tax expenditures in the 38 OECD countries between 1999 and today is examined. A look at the data shows that even in countries with high GDP and comprehensive tax coverage, reporting is often incomplete. For a subset of 16 OECD countries for which (relatively) continuous reporting over the period is available, we look at the development of tax benefits for households and firms. We can show that data availability improves over time. For the development of business tax expenditures, a weakly significant positive trend can be identified in terms of tax revenues foregone, driven mainly by the Netherlands and Ireland. Both countries are known for wanting to strengthen their business location through generous tax expenditures for businesses. Tax expenditures for private households, which are on average higher than the level of tax expenditures for businesses in the countries under review, do not show any significant time trend, even though they were increasingly used to relieve the burden on private households and businesses during the financial crisis of 2008/09. In order to compare tax expenditures between countries and to better assess their effectiveness, regular reporting at the national level, transparent definitions and ideally uniform standards would be helpful. Regular monitoring by a commission of experts could contribute to the consistency and comparability.
Topic:
Development, Business, Tax Systems, and OECD
Political Geography:
Global Focus

18. The international tax agreement of 2021: Why it’s needed, what it does, and what comes next?

Author:
Kimberly Clausing
Publication Date:
04-2023
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics (PIIE)
Abstract:
In 2021, more than 135 jurisdictions agreed on transformative new international tax rules that would establish a minimum tax rate of 15 percent on multinational corporate income regardless of where it was reported. In December 2022, the European Union unanimously moved forward to implement this minimum tax, and other countries, including South Korea, Japan, Australia, Canada, and the United Kingdom, are also either implementing the tax or taking substantial steps toward implementation. In tandem, the United States should also reform its international tax system and adopt a stronger minimum tax. While the future of the international agreement is uncertain, it has important implications for the ability of governments worldwide to create tax systems that are administrable, fair, and efficient. The agreement also demonstrates important guiding principles for the future of multilateral cooperation on global collective action problems, including efforts to protect public health from future pandemics, address nuclear proliferation, and resolve territorial conflicts. US progress on international tax reform would enhance much needed international cooperation on these issues.
Topic:
Economics, Treaties and Agreements, Reform, European Union, and Tax Systems
Political Geography:
Europe and Global Focus

19. Fiscal dependence on extractive revenues: Measurement and concepts

Author:
Kyle McNabb
Publication Date:
03-2023
Content Type:
Working Paper
Institution:
United Nations University
Abstract:
The aims of this paper are twofold. It firstly identifies and discusses the extent to which public revenues from natural resources are adequately captured in existing cross-country revenue databases, before exploring the extent to which such data can be used to estimate countries’ fiscal dependence on extractives. I first discuss key conceptual, definitional and measurement issues, before comparing the coverage of key existing databases, notably the UNU-WIDER Government Revenue Dataset (GRD). I then propose a new measure of fiscal dependence on extractive revenues (FDE). Whilst a number of existing studies have attempted to better quantify countries’ resource dependence, to the best of my knowledge none has yet proposed an indicator that ties the idea of dependence to any outcomes. The FDE simply calculates the extent to which extractive-producing countries can fund day-to-day government spending with non-extractive revenues. I find that the FDE is strongly correlated with existing measures of extractive dependence but can ultimately tell us more about countries’ fiscal positions and resulting vulnerability to shocks to revenue or government spending.
Topic:
Natural Resources, Tax Systems, Extractive Industries, and Economic Dependence
Political Geography:
Africa, South Asia, and India

20. Egypt: The Price of Inaction on Tax Reform

Author:
Omar Ghannam
Publication Date:
01-2023
Content Type:
Research Paper
Institution:
Arab Reform Initiative (ARI)
Abstract:
Like public finances elsewhere, the public finances of the Egyptian state suffer from a semi-permanent deficit. Although a limited deficit in state budgets is acceptable for most prevailing economic theories, the persistent and worsening deficit in public budgets leads to severe phases during which the economy suffers. During periods of economic prosperity, soft loans are easily accessible, which encourages states to rely on borrowing as a secondary source of financing for extended periods until it becomes a permanent source of financing. The financial market eventually puts an end to every period of easy borrowing, forcing the government to face the reality it has tried to avoid. Under such circumstances, governments have three tools at their disposal: borrowing at the highest interest rate, austerity and disabling services and social protection programs, and raising taxes and customs duties. Borrowing at the highest interest rate is every government's first choice because it does not require a reformulation of the social, economic, and political contract between the state and its citizens. But the price of such a policy is a worsened deficit. Borrowing, before or after a crisis, is not a solution but merely a postponement of the crisis, in the hope that the market recovers. When it is no longer possible to borrow amid the worsening economic conditions of a crisis, the government resorts to other tools with varying degrees of risk. Austerity is a recipe for widespread social outcry and has catastrophic effects on the poor and middle classes as well as the overall economy due to decreased purchasing power. To overcome the crisis with the least social tension, the state can also resort to taxation to generate possible revenues whether from the economy as a whole or the sectors and classes with concentrated surpluses of value. The more severe the crisis, the more the government is forced to use additional tools and impose strict measures. Debts are nothing but deferred taxes, and taxes remain key in every economic crisis. When a global economic crisis looms, questions abound. Could the crisis be approached with fewer social and economic burdens and with more room for maneuver? In this context, this paper will discuss the tax policies adopted in the past few years in Egypt and how they could have been more effective. The primary role of taxes is to meet the government's financial needs to implement its role under the social contract, whether formal or informal. Therefore, taxes are a convenient introduction to understanding the political economy of any state. Tax policies are an essential tool for achieving macroeconomic goals, and they directly reflect the political and socioeconomic considerations driving a country’s economy. This paper will address the main role of taxes in financing the requirements of the social contract from the perspective of the adequacy and effectiveness of tax collection.
Topic:
Economics, Governance, Reform, Finance, and Tax Systems
Political Geography:
Africa and Egypt