03. Journals
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These are journal articles published in World Bank journals as well as externally by World Bank authors.
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Publication Using Satellite Imagery to Create Tax Maps and Enhance Local Revenue Collection(Taylor and Francis, 2020) Ali, Daniel Ayalew; Deininger, KlausAlthough taxes on land and property have many desirable attributes, the challenge of ensuring completeness of tax rolls and currency of valuations preclude their effective use to support urbanization and service provision in many developing countries. The example of Kigali shows how building footprints and heights generated from high-resolution satellite imagery, together with sales prices and routine statistical data, allow to assess and improve coverage and design of property tax systems. We show that only 40% of potential land lease fee revenue (of US$ 4.9 million) was collected and that moving to 1% value-based tax would increase revenue almost 10 times while being less regressive than the current system. While this could allow reducing the tax burden for low-income groups, exemptions should be applied with caution based on careful empirical analysis.Publication Fresh Money for Health? The (False?) Promise of 'Innovative Financing' for Health in Malawi(Taylor and Francis, 2018-10-29) Chansa, Collins; Mwase, Takondwa; Matsebula, Thulani Clement; Kandoole, Priscilla; Revill, Paul; Makumba, John Bosco; Lindenow, Magnus; Chansa, CollinsSince 2013, the government of Malawi has been pursuing a number of health reforms, which include plans to increase domestic financing for health through “innovative financing.” As part of these reforms, Malawi has sought to raise additional tax revenue through existing and new sources with a view to earmarking the revenue generated to the health sector. In this article, a systematic approach to assessing feasibility and quantifying the amount of revenue that could be generated from potential sources is devised and applied. Specifically, the study applies the Delphi forecasting method to generate a qualitative assessment of the potential for raising additional tax revenues from existing and new sources, and the gross domestic product (GDP)-based effective tax rate forecasting method to quantify the amount of tax revenue that would be generated. The results show that an annual average of 0.30 USD, 0.46 USD, and 0.63 USD per capita could be generated from taxes on fuel and motor vehicle insurance over the period 2016/2017–2021/2022 under the low, medium, and high scenarios, respectively. However, the proposed tax reform has not been officially adopted despite wide consultations and generation of empirical evidence on the revenue potential. The study concludes is that revenue generation potential of innovative financing for health mechanisms in Malawi is limited, and calls for efforts to expand fiscal space for health to focus on efficiency-enhancing measures, including strengthening of governance and public financial management.Publication Dictators Walking the Mogadishu Line: How Men Become Monsters and Monsters Become Men(Published by Oxford University Press on behalf of the World Bank, 2018-10) Larcom, Shaun; Sarr, Mare; Willems, TimHistory offers many examples of dictatorswho worsened their behavior significantly over time (like Zimbabwe’s Mugabe) as well as dictators who displayed remarkable improvements (like Rawlings of Ghana).We show that such mutations can result from rational behavior when the dictator’s flow use of repression is complementary to his stock of wrongdoings: past wrongdoings then perpetuate further wrongdoings and the dictator can unintentionally get trapped in a repressive steady state where he himself suffers from ex-post regret. This then begs the question why such a dictator would ever choose to do wrong in the first place. We show that this can be explained from the dictator’s uncertainty over his degree of impunity in relation to wrongdoing, which induces him to experiment along this dimension. This produces a setting where any individual rising to power can end up as either a moderate leader, or as a dreaded tyrant. Since derailment is accidental and accompanied by ex-post regret, increasing accountability can be in the interest of both the public and the dictator.Publication Does Inducing Informal Firms to Formalize Make Sense?: Experimental Evidence from Benin(Elsevier, 2018-01) Benhassine, Najy; McKenzie, David; Pouliquen, Victor; Santini, MassimilianoEfforts to bring informal firms into the formal sector are often based on a view that this will bring benefits to the firms themselves, or at least benefit governments through increasing the tax base. A randomized experiment based around the introduction of the entreprenant legal status in Benin is used to test these assumptions, along with supplementary efforts to enhance the presumed benefits of formalizing to firms. Few firms register when just given information about the new regime, but our full package of supplementary efforts boosts formalization by 16.3 percentage points. However, this formalization does not bring firms higher sales or profits, and the cost of formalizing these firms exceeds the added taxation they will pay over the next decade. We show how better targeting of these policies towards firms that look more like formal firms to begin with can increase the formalization rate and improve cost-effectiveness.Publication Budget Rules and Resource Booms and Busts: A Dynamic Stochastic General Equilibrium Analysis(Published by Oxford University Press on behalf of the World Bank, 2017-02) Devarajan, Shantayanan; Go, Delfin S.This paper develops a dynamic, stochastic, general-equilibrium model to analyze and derive simple budget rules in the face of volatile public revenue from natural resources in a low-income country like Niger. The simulation results suggest three policy lessons or rules of thumb. When a resource price change is positive and temporary, the best strategy is to save the revenue windfall in a sovereign fund and use the interest income from the fund to raise citizens’ consumption over time. This strategy is preferred to investing in public capital domestically, even when private investment benefits from an enhanced public capital stock. Domestic investment raises the prices of domestic goods, leaving less money for government to transfer to households; public investment is not 100 percent effective in raising output. In the presence of a negative temporary resource price change, however, the best strategy is to cut public investment. This strategy dominates other methods, such as trimming government transfers to households, which reduces consumption directly, or borrowing, which incurs an interest premium as debt rises. In the presence of persistent (positive and negative) shocks, the best strategy is a mix of public investment and saving abroad in a balanced regime that provides a natural insurance against both types of price shocks. The combination of interest income from the sovereign fund, transfers to households, and output growth brought about by public investment provides the best protective mechanism to smooth consumption over time in response to changing resource prices.Publication Producing Home Grown Solutions : Think Tanks and Knowledge Networks in International Development(2011-09) Datta, Ajoy; Young, JohnMainstream international development discourse has long heralded the importance of home grown solutions and national ownership of development policies. Ownership has been seen as the missing link between the significant development aid inflows from the North and poverty reduction outcomes in the South. You only have to look to international agreements such the 2002 Monterrey Consensus or the2005 Paris Declaration for evidence of this.Publication Development with a Human Face(2011-04) NdunGabonne, NjongonkuluArchbishop Njongonkulu NdunGabonne is Head of African Monitor, a pan-African nonprofit or Gabonnization that monitors development funding, delivery, and impact and helps bring African voices to the development agenda.Publication Development 3.0(2011-04) Devarajan, ShantayananShantayanan Devarajan Gabonve a lunch talk at a recent conference of civil society and technology people orGabonnized by the Tech@State folks at the U.S. State Department.Publication Developing the Capacity of Post-Conflict Countries through South-South Partnerships(2010-10) Muthayan, SaloshiniFollowing years of war and devastation, the citizens of post-conflict countries look to the government with high expectations for a better quality of life. These countries, however, face severe institutional and human capacity constraints and normally have no other option than turning to donors for help in reconstructing their societies.Publication South-South Cooperation and Knowledge Exchange : A Perspective from Civil Society(2010-10) Cruz, AnabelSouth-South cooperation is not new. It has been around for several decades in the form of economic integration, cultural exchanges, and technical cooperation. Traditional North-South cooperation, however, with resources coming from the rich northern countries to the poor southern ones has been supplemented by other models. Indeed, middle income countries have been taking on various roles, not only as recipients of development aid, but also as providers of development cooperation. New actors and approaches have entered the development cooperation landscape.