This programme looks
at the connection between political development and public finances; in
short, the links between the way states raise money and the way they use
We begin with the
hypothesis that the behaviour of states is closely linked to citizen-state
interactions over finance, and seek to explore
- the causal relationships
that are implied and
- the implications
for development policy.
We want to know to
what extent changes in the ways in which states obtain their revenue can
contribute to the effectiveness of public action in poverty reduction?
How can the legitimacy of taxation be enhanced and the tax base broadened
in ways consistent with equity and efficiency of collection? How can efforts
to promote 'transparency' in public expenditure become institutionalised
and be designed to serve the poor?
We wish to trace the
causal links between the resources of the state and important social,
economic and political characteristics in poor countries. The resources
of the state are an interesting window to the state precisely because
the causal relationships between resources and other variables are so
complex. Revenues and expenditures are results, causes, and even indicators
of political development and governance. We believe that it is crucial
to add resource considerations to the way we understand the state. Specifically,
we are interested in the extent to which certain patterns of gathering
and using financial resources help us to understand state responsiveness
to the needs of poor people. The purpose of this programme is to undertake
research on these issues and, perhaps more important in the long term,
to act as a clearing-house and stimulus for research undertaken elsewhere.
The key questions
guiding this programme are:
- To what extent
and in which ways are systems of public finance causes, results, or
indicators of the poor performance and lack of legitimacy of Southern
- What is the scope
for policy interventions to generate more synergy between the institutions
of public finance and effective, legitimate public authority?
Programme 1 projects include 'Enhancing Effectiveness and
Legitimacy in Southern Africa', conducted by the Centre for Policy
Studies, South Africa.
This research examines the nature of resourcing the state in the
context of the social, political and economic dynamics in South
Africa and other Southern African countries. The project will carry
out an interview-based study of attempts to enhance revenue-raising
capacity. It will consider the assumptions behind government approaches,
the way these were implemented, the results achieved and the obstacles
confronted. There will also be focus groups to investigate public
perceptions of state revenue collection and its legitimacy, and
levels of compliance.
A Resource on Tax Policy in Latin America
In connection with research under this programme, we are pleased to make available a resource on tax policy in Latin America. More