Moreno-Dodson, BlancaLe, Tuan MinhBayraktar, Nihal2013-01-042013-01-042012-10https://hdl.handle.net/10986/12094One of the important factors for economic development is the existence of an effective tax system. This paper deals with the concept and empirical estimation of countries' taxable capacity and tax effort. It employs a cross-country study from a sample of 110 developing and developed countries during 1994-2009. Taxable capacity refers to the predicted tax-to-gross domestic product ratio that can be estimated empirically, taking into account a country's specific macroeconomic, demographic, and institutional features, which all change through time. Tax effort is defined as an index of the ratio between the share of the actual tax collection in gross domestic product and taxable capacity. The use of tax effort and actual tax collection benchmarks allows the ranking of countries into four different groups: low tax collection, low tax effort; high tax collection, high tax effort; low tax collection, high tax effort; and high tax collection, low tax effort. The analysis provides broad guidance for tax reforms in countries with various levels of taxable capacity and revenue intake.en-USCC BY 3.0 IGOAGRICULTUREBANK POLICYBENCHMARKBENCHMARKSBUDGET DEFICITBUDGET DEFICITSBUREAUCRATIC QUALITYBUSINESS CLIMATEBUSINESS CYCLEBUSINESS CYCLESCENTRAL GOVERNMENTCOEFFICIENTSCOMPLIANCE COSTSCONSUMPTION EXPENDITURECOUNTRY RISKDATA AVAILABILITYDEDUCTIONSDEMOGRAPHICDEVELOPING COUNTRIESDEVELOPING COUNTRYDEVELOPMENT BANKDEVELOPMENT ECONOMICSDEVELOPMENT POLICYEARNED INCOME TAX CREDITECONOMIC CRISISECONOMIC DEVELOPMENTECONOMIC OUTLOOKECONOMIC POLICIESECONOMIC SECTORSECONOMIC STRUCTUREECONOMIC STRUCTURESEFFICIENCY OF TAX COLLECTIONEFFICIENCY OF TAXESEXPENDITURE NEEDSEXPORTSFINANCIAL CRISISFISCAL BALANCESFISCAL DECENTRALIZATIONFISCAL POLICYGDPGDP PER CAPITAGLOBALIZATIONGOOD GOVERNANCEGOVERNMENT REVENUEGOVERNMENT SPENDINGGROSS DOMESTIC PRODUCTGROSS VALUEGROWTH RATEGROWTH RATESINCOMEINCOME GROUPINCOME GROUPSINCOME LEVELINCOME LEVELSINCOME TAXINCOME TAXESINDEX NUMBERSINSURANCEINTERNATIONAL BANKINTERNATIONAL BUSINESSINTERNATIONAL DEVELOPMENTINTERNATIONAL STANDARDINTERNATIONAL TRADEINVESTMENT CLIMATEINVESTMENT DECISIONSLABOR MARKETLOW-INCOME COUNTRIESLOW-INCOME ECONOMIESMACROECONOMIC VARIABLESMARKET ECONOMYMARKET STANDARDSMIDDLE INCOME COUNTRIESMIDDLE-INCOME COUNTRIESMIDDLE-INCOME ECONOMIESMONETARY FUNDNATURAL RESOURCESOPEN ECONOMIESOPEN MARKETOPEN MARKET ECONOMYOUTPUTOUTPUT GAPOUTPUTSPARTICULAR COUNTRYPOLITICAL ECONOMYPOLITICAL SYSTEMPRIVATE INVESTMENTPUBLIC EXPENDITUREPUBLIC EXPENDITURESPUBLIC FUNDSPUBLIC INVESTMENTPUBLIC REVENUEPUBLIC SPENDINGREDISTRIBUTIONREGRESSION ANALYSESREGRESSION ANALYSISREGULATORY ENVIRONMENTREVENUE CAPACITYREVENUE COLLECTIONREVENUE ENHANCEMENTREVENUE FORECASTINGREVENUE INCREASESREVENUE MOBILIZATIONREVENUE SOURCESSTRUCTURAL ADJUSTMENTSUB-NATIONALTAXTAX ADMINISTRATIONTAX ADMINISTRATION PROCEDURESTAX BASETAX BURDENTAX CAPACITYTAX COLLECTIONTAX COLLECTION PROCESSTAX EFFORTTAX EFFORT INDEXESTAX EFFORTSTAX EXPENDITURESTAX POLICIESTAX POLICYTAX PURPOSESTAX RATETAX RATESTAX RATIOTAX RATIOSTAX REFORMTAX REFORMSTAX REGIMESTAX REVENUETAX REVENUE PERFORMANCETAX REVENUESTAX STRUCTURETAX SYSTEMTAX SYSTEMSTAXATIONTAXATION POLICIESTRANSPARENCYVALUE ADDEDVOLATILITYWAGESWORLD DEVELOPMENT INDICATORWORLD DEVELOPMENT INDICATORSWorld Bank10.1596/1813-9450-6252