Poor Democracies in a Conundrum: International Trade and Government Revenues in Developing Countries

Lecture by Nita Rudra (Georgetown University, Dept. of Government)

Date: Thursday, December 10, 2015
Time: 12:30pm – 2:00pm
Location: Storrs Campus, Dodd Center Room 162
Light lunch provided

Governments of developing countries need revenue to meet their substantial spending, development, and poverty reduction goals. How has globalization affected their ability to raise such revenues? In this analysis, we contribute to the globalization and taxation debate by focusing on the fiscal impacts of declining international trade tax revenue in poor nations. We hypothesize that regime type is a major determinant of revenue raising capacity after liberalization policies have been adopted.

As international trade taxes decline- once the primary form of government revenue generation in developing economies- policymakers in poor democracies find it more challenging than their authoritarian counterparts to replace the revenue loss via domestic tax reform. India represents a paradigmatic example of our hypothesis. The unfortunate consequence is that the failure to recover declining trade tax revenue in democracies is then associated with a reduction in spending on public goods.

Contact for Details: Betty.Hanson@uconn.edu (860) 742-8628

Co-sponsored by India Studies; Human Rights Institute Economic & Social Rights Program/ESRG