Seminar: Taxation and Development

Course content

Developing countries need investments in infrastructure, education and health. Private actors have played a big role in supplying these investments, but cannot always deliver due to market failures and credit constraints. Governments can in this case act as a public provider, but this requires tax revenue.  Unfortunately, taxes of any sort have indeed proven hard to collect in developing countries as issues of corruption, informality and low regulatory capacity remain.

How can governments obtain the means necessary for development? How can the capacity to raise taxes be increased? Which rules from standard economic theory apply and more importantly which do not? These are the questions we seek to answer in this seminar.

Education

MSc programme of Economics
The seminar is primarily for students at the MSc of Economics

Learning outcome

The students in this class have the opportunity to do empirical work, theory or a literature review. Topics may include (but are not limited to):

  • Corporate taxation and corporate tax avoidance in developing countries
  • Profit shifting in developing countries
  • How should sales taxes be organized in developing country setting?
  • Which taxes are most efficient in a developing country setting?
  • How to organize auditing, when you don’t trust the auditors?
  • How to tax an informal market?
  • The influence of special and political interests on tax structures in developing countries
  • Optimal rules of taxation when regulatory capacity is restricted
  • Fiscal capacity in developing countries

Two lectures with a high degree of teacher-student interaction followed by student work on the term paper and supervision. Students will then present their work to the other students in the seminar where the paper will be discussed. At the student presentations, all students will be assigned another paper where they serve as a discussant and lead the discussion.

Lecture 1: Friday September the 9th, 10.15-12.00
Lecture 2: Friday September the 16th, 10.15-12.00

Besley, T., Persson, T., 2013. Taxation and Development, in: Alan J. Auerbach, Raj Chetty, Martin Feldstein and Emmanuel Saez (eds.) Handbook of Public Economics, Volume 5, Elsevier, Amsterdam & Oxford, 257-328.

Best, K., Brockmeyer, A., Kleven, H., Spinnewijn, J., Waseem, M., 2015. Production vs Revenue Efficiency with Limited Tax Capacity: Theory and Evidence from Pakistan. Journal of Political Economy 123(6), 1311-1355.

Gordon, R., Li, W., 2009. Tax structures in developing countries: Many puzzles and a possible explanation. Journal of Public Economics 93, p. 855-866.

Crivelli, E., de Mooij, R., Keen, M., 2015. Base Erosion, Profit Shifting and Developing Countries. IMF Working Paper WP/15/118.

Further readings will be dependent on research question

B.Sc. in Economics.

ECTS
7,5 ECTS
Type of assessment
Written assignment
A written seminar paper in English.
Aid
All aids allowed

Al aids for the written seminarpaper.

Marking scale
7-point grading scale
Censorship form
External censorship
up to 20 % censorship at the seminarpaper
Criteria for exam assessment

The student must in a satisfactory way demonstrate that he/she has mastered the learning outcome of the course.

  • Category
  • Hours
  • Seminar
  • 6
  • Project work
  • 200
  • English
  • 206