Hostname: page-component-848d4c4894-5nwft Total loading time: 0 Render date: 2024-05-13T05:54:49.460Z Has data issue: false hasContentIssue false
  • English
  • Français

Tax Reforms in Latin America in an Era of Democracy

Published online by Cambridge University Press:  05 September 2022

Diego Focanti ,
Mark Hallerberg  and
Carlos Scartascini
Diego Focanti
Affiliation:
Brown University
Mark Hallerberg
Affiliation:
Hertie School of Governance
Carlos Scartascini
Affiliation:
Inter-American Development Bank
Rights & Permissions [Opens in a new window]

Abstract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

When studying the politics of taxation it is important to evaluate changes to the tax code in terms of rates, bases, and exemptions instead of just revenues. With that objective in mind, we have compiled a more comprehensive database of tax reforms for Latin America. In this article, we present a description of the database as well as the stylized facts. We also explore the economic and political determinants of reform such as the role of the economic and politico-institutional variables, and compare the results to the consensus. We find two interesting results. First, determinants of reforms seem to have changed over the years as democracies have solidified. Second, disaggregating reforms in various ways is a better strategy for understanding the mechanisms behind tax reforms than looking at the overall number of reforms. Having developed an exhaustive database that allows such disaggregation we provide motivation for future research on this topic.

Resumo

Resumo

Al estudiar la economía política de los impuestos, es importante evaluar las reformas de acuerdo a los cambios legales que se hacen a las tasas, bases o exenciones, en lugar de observar únicamente cambios en la recaudación. Por ello, hemos recopilado una base de datos que incluye las reformas tributarias en todo el continente latinoamericano. En este trabajo, presentamos una descripción de la base y de los hechos estilizados que observamos. Asimismo, exploramos los determinantes económicos y políticos de las reformas tributarias, tales como diferencias en instituciones políticas y comparamos nuestros resultados con el consenso vigente. Dos resultados se destacan: en primer lugar, los determinantes de las reformas parecen haber cambiado en el tiempo a medida que las democracias se han consolidado; en segundo, en lugar de sólo comparar el número de reformas, la desagregación de la información en diferentes maneras permite entender mejor los mecanismos subyacentes. Habiendo desarrollado una base de datos que permite tal desagregación, proveemos la motivación para investigaciones futuras sobre el tema.

Type
Research Article
Information
Latin American Research Review , Volume 51 , Issue 1 , 2016 , pp. 132 - 158
Copyright
Copyright © 2016 by the Latin American Studies Association

Footnotes

The authors would like to thank the editor, three reviewers, and participants at the DC Comparative Politics and Political Economy Seminar, the seminar “The Future of Taxation” at the Inter-American Development Bank, MPSA 2012, Western Economic Association 2012, and the German Development Institute for their comments and suggestions on the overall research project. We would also like to thank Maria Franco Chuaire for her assistance with our research. The opinions expressed in this document are those of the authors and do not necessarily reflect those of the Inter-American Development Bank, its Board of Directors, or the countries they represent.

References

Ardanaz, Martin, and Scartascini, Carlos 2013 “Inequality and Personal Income Taxation: The Origins and Effects of Legislative Malapportionment.” Comparative Political Studies 46 (12): 1636–1663.Google Scholar
Basinger, Scott, and Hallerberg, Mark 2004 “Remodeling the Competition for Capital: How Domestic Politics Erases the Race-to-the-Bottom.” American Political Science Review 98 (2): 261–276.CrossRefGoogle Scholar
Bird, Richard 1992 “Tax Reform in Latin America: A Review of Some Recent Experiences.” Latin American Research Review 27 (1): 7–36.Google Scholar
Bird, Richard 2003 “Taxation in Latin America: Reflections on Sustainability and the Balance between Equity and Efficiency.” International Tax Program Papers 0306, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.CrossRefGoogle Scholar
Bonvecchi, Alejandro 2010 “The Political Economy of Fiscal Reform in Latin America: The Case of Argentina.” IDB Working Paper Series No. IDB-WP-175. Washington, DC: Inter-American Development Bank.Google Scholar
Castanheira, Micael, Nicodeme, Gaetan, and Profeta, Paola 2011 “On the Political Economics of Tax Reforms.” CESIFO Working Paper No. 3538.Google Scholar
Coopers & Lybrand 1989-1991 International Tax Summaries. Hoboken, NJ: John Wiley and Sons.Google Scholar
Di John, Jonathan 2006 “The Political Economy of Taxation and Tax Reform in Developing Countries.” UNU-WIDER Research Paper No. 2006/74.Google Scholar
Fairfield, Tasha 2010 “Business Power and Tax Reform: Taxing Income and Profits in Chile and Argentina.” Latin American Politics and Society 52 (2): 37–69.CrossRefGoogle Scholar
Figari, Francesco, and Gandullia, Luca 2008 “An Outline of Tax Systems and Tax Reforms in Latin America.” In Tax Systems and Tax Reforms in Latin America, edited by Bernardi, Luigi, Barreix, Alberto, Marenzi, Anna, and Profeta, Paola, 41–62. New York: Routledge.Google Scholar
Focanti, Diego, Scartascini, Carlos, and Hallerberg, Mark 2013 “Tax Reforms in Latin America in an Era of Democracy. A Database.” IDB Database No. 111. Washington, DC: Inter-American Development Bank.Google Scholar
Ganghof, Steffen 2006 The Politics of Income Taxation: A Comparative Analysis of Advanced Industrial Countries. Colchester, UK: ECPR Press.Google Scholar
Genschel, Philipp, and Jachtenfuchs, Markus 2011 “How the European Union Constrains the State: Multilevel Governance of Taxation.” European Journal of Political Research 50 (3): 293–314.Google Scholar
Gomez Sabaini, Juan Carlos, and Martner, Ricardo 2008 “Taxation Structure and Main Tax Policy Issues.” In Tax Systems and Tax Reforms in Latin America, edited by Bernardi, Luigi, Barreix, Alberto, Marenzi, Anna, and Profeta, Paola, 19–40. New York: Routledge.Google Scholar
Gomez Sabaini, Juan Carlos, and Martner, Ricardo 2012 “Explaining Tax Increases in Latin America.” Unpublished manuscript. Inter-American Development Bank.Google Scholar
Hays, Jude C. 2009 Globalization and the New Politics of Embedded Liberalism. Oxford: Oxford University Press.CrossRefGoogle Scholar
IDB (Inter-American Development Bank) and CIAT 2012 “Carga fiscal ajustada de América Latina y el Caribe (1990-2010).” Database preliminary version.Google Scholar
IDB (Inter-American Development Bank) and CIAT 2013 More Than Revenue: Taxation as a Development Tool. New York: Palgrave Macmillan / IDB and CIAT.Google Scholar
Lora, Eduardo 2007 “Trends and Outcomes of Tax Reform.” In The State of State Reform in Latin America, edited by Lora, Eduardo, 185–212. Stanford, CA: Stanford University Press.Google Scholar
Machado, Fabiana, Scartascini, Carlos, and Stein, Ernesto 2013 “The Politics of Taxation.” In More than Revenue: Taxation as a Development Tool, edited IDB. New York: Palgrave Macmillan / IDB and CIAT.Google Scholar
Magar, Eric, Romero, Vidal, and Timmons, Jeffrey 2010 “The Political Economy of Fiscal Reforms in Latin America: Mexico.” Unpublished manuscript. Washington, DC: Inter-American Development Bank.Google Scholar
Mahon, James E. Jr. 2004 “Causes of Tax Reform in Latin America, 1977-95.” Latin American Research Review 39 (1): 3–30.Google Scholar
Melo, Marcus, Pereira, Carlos, and Sousa, Saulo 2010 “The Political Economy of Fiscal Reform in Brazil: The Rationale for the Suboptimal Equilibrium.” IDB Working Paper Series IDBWP-117. Washington, DC: Inter-American Development Bank.Google Scholar
Morley, Samuel A., Machado, Roberto, and Pettinato, Stefano 1999 “Indexes of Structural Reform in Latin America.” Serie Reformas Económicas 12, Santiago, Chile: ECLAC.Google Scholar
Olivera, Mauricio, Pachón, Mónica, and Perry, Guillermo 2010 “The Political Economy of Fiscal Reform: The Case of Colombia, 1986-2006.” IDB Working Paper Series No. IDB-WP-181. Washington, DC: Inter-American Development Bank.Google Scholar
Persson, Torsten, and Tabellini, Guido 2003 The Economic Effects of Constitutions. Cambridge, MA: MIT Press.CrossRefGoogle Scholar
Plümper, Thomas, Tröger, Vera E., and Winner, Hannes 2009 “Why Is There No Race to the Bottom in Capital Taxation?” International Studies Quarterly 53 (3): 761–786.CrossRefGoogle Scholar
Price Waterhouse Coopers 1992-2004/5a Worldwide Tax Summaries: Corporate Taxes. Hoboken, NJ: John Wiley & Sons.Google Scholar
Price Waterhouse Coopers 1992-2004/5b Worldwide Tax Summaries: Individual Taxes. Hoboken, NJ: John Wiley & Sons.Google Scholar
Profeta, Paola, and Scabrosetti, Simona 2008 “Political Economy Issues of Taxation.” In Tax Systems and Tax Reforms in Latin America, edited by Bernardi, Luigi, Barreix, Alberto, Marenzi, Anna, and Profeta, Paola, 63–76. New York: Routledge.Google Scholar
Rodríguez, Francisco 1993 “Tax Reforms in Latin America 1978-1992: A Comparative Analysis.” Social and Economic Studies 42 (4): 1–23.Google Scholar
Sanchez, Omar 2006 “Tax System Reform in Latin America: Domestic and International Causes.” Review of International Political Economy 13 (5): 772–801.CrossRefGoogle Scholar
Schneider, Aaron 2012 State-Building and Tax Regimes in Central America. New York: Cambridge University PressGoogle Scholar
Swank, Duane 2006 “Tax Policy in an Era of Internationalization: Explaining the Spread of Neoliberalism.” International Organization 60 (4): 847–882.Google Scholar
Swank, Duane, and Steinmo, Sven 2002 “The New Political Economy of Taxation in Advanced Capitalist Democracies.” American Journal of Political Science 46 (3): 642–655.Google Scholar
Tanzi, Vito 2013 “Tax Reform in Latin America: A Long-Term Assessment.” Woodrow Wilson Center Update on the Americas, May. Washington, DC: Woodrow Wilson Center. http://www.wilsoncenter.org/sites/default/files/Vito%20Tanzi%20Keynote%20WC%202012.pdf.Google Scholar