DP9307 Taxation and Development

Author(s):	Timothy J. Besley, Torsten Persson
Publication Date:	January 2013
Keyword(s):	State Capacity, Taxation
JEL(s):	H11, H20, O17, O43
Programme Areas:	Public Economics, Development Economics
Link to this Page:	cepr.org/active/publications/discussion_papers/dp.php?dpno=9307

The central question in taxation and development is: "how does a government go from raising around 10% of GDP in taxes to raising around 40%"? This paper looks at the economic and political forces that shape the way that fiscal capacity is created and sustained. As well as reviewing the literature and evidence, it builds an overarching framework to help structure thinking on the topic.