Taxation, Governance and Poverty: Where Do Middle Income Countries Fit In?

Aug 19, 2004

This paper studies the direct and indirect contributions of tax reform to good governance and poverty reduction in middle income countries. It is structured around four major questions: 1) What is the relevance of taxation and tax reform to poverty reduction and good governance in poorer countries? 2) Why focus on middle income countries? 3) Why focus on the linkages between taxation, governance, and poverty reduction? 4) What should the international aid and development community have learned about the politics of tax reform? The paper’s conclusions are centered on the idea that tax reform will be an increasingly featured issue in the public policy agenda in poorer countries, and should therefore be a major concern of aid donors and development agencies.