measuring and improving the performance of customs valuation controls an illustration with gabon modern customs administrations aim to both facilitate legal trade and combat fraud to meet this dual objective many customs administrations in developing countries must give risk management a highly prominent role in this context of modernisation this paper first provides stylised facts on the performance of the customs controls carried out at the gabon border then we compare gabon s granular import customs data with international trade statistics based on this comparison we identify undetected fraud and present a methodology to target ex post audits finally we define indicators to monitor the performance of customs valuation controls

tariff evasion and rules of origin violations under the canada u s free trade agreement using product level data on trade between canada and the u s this paper presents evidence of tariff evasion and violation of the rules of origin occurring under the canada u s free trade agreement cusfta it shows that more imports go unreported at the destination country when tariffs are higher consistent with the tariff evasion hypothesis this result implies that the trade creation effect of a free trade agreement may in fact be due to less underreporting further this paper shows that the larger canadian tariff preference margin for the u s is associated with more goods originating in third countries being transshipped through the u s territory for re export the preference margin is also positively correlated with the value of excess imports from the u s which qualify for preferential treatment both results suggest the presence of persistent violations of cusfta s rules of origin a l aide de donnees au niveau des produits sur les flux de commerce entre le canada et les etats unis on montre qu il y a evitement de tarif et violation des regles d origine dans les operations de l accord de libre echange canada etats unis on montre que davantage d importations ne sont pas declarees au point de destination quand les tarifs sont eleves dans l esprit meme de l hypothese d evitement de tarif ce resultat implique que l effet de creation de commerce d un accord de libre echange peut en fait etre attribuable a moins de sous declaration de plus le texte montre que les plus grandes marges preferentielles des tarifs avec les etats unis sont associees a davantage de biens en provenance de tiers pays et convoyes a travers le territoire americain pour re exportation la marge preferentielle est aussi positivement co reliee avec la valeur des importations excedentaires en provenance des etats unis qui se qualifient pour un traitement preferentiel ces deux ensembles de resultats suggerent la presence persistante de violations des regles d origine de l accord de libre echange canada etats unis

poverty reduction strategy papers a new convergence abstract poverty reduction strategy papers represent both a primary policy device of international development institutions and an instance of a wider international convergence of public policy around global integration and social inclusion charting the emergence of these approaches this paper argues that this convergence has a number of structural predilections which favor the technical and juridical over the political economic and a disciplinary framework over a practical contest drawing extensively on decentralized governance and poverty reduction programs in uganda this paper shows how these predilections obscure power relations and restrict practical and political options while exacting heavy establishment and compliance costs

entrepot trade and smuggling in west africa benin togo and nigeria official trade statistics indicate very little intra african trade but this is often because of the prevalence of unrecorded trade particularly smuggling this paper explores smuggling from benin and togo into nigeria nigeria has very high import tariffs and bans on certain products togo and benin have deliberately maintained low import barriers to facilitate an entrepot role vis a vis nigeria and land locked sahelian countries togo competes at a geographic disadvantage relative to benin for access to the nigerian market and compensates with lower transit taxes the volume and composition of cross border trade is analysed using data obtained from benin and togo customs authorities as well as interviews with traders and customs officials in both countries benin and to a lesser extent togo are the origin of a very large volume of transshipment of precisely those products which are heavily protected in nigeria such as used cars cloth and rice it is common knowledge in benin and togo that these imports although declared for domestic consumption or transit to other countries are in fact overwhelmingly intended for nigeria smuggling is a major source of income and employment in benin and togo but provides a fragile and unreliable foundation for economic development

the peter pan syndrome in emerging markets the productivity transparency trade off in it adoption firms invest in technology to increase productivity yet in emerging markets where a culture of informality is widespread information technology it investments leading to greater transparency can impose a cost through higher taxes and the need for regulatory compliance the tendency of firms to avoid productivity enhancing technologies and remain small to avoid transparency has been dubbed the peter pan syndrome we examine whether firms make the trade off between productivity and transparency by examining it adoption in the indian retail sector we find that computer technology adoption is lower when firms are motivated to avoid transparency specifically technology adoption is lower when there is greater corruption but higher when there is better enforcement and auditing so firms have a higher productivity gain threshold to adopt computers in corrupt business environments that suffer from patchy and variable enforcement of the tax laws not accounting for this motivation to hide from the formal sector underestimates productivity gains from computer adoption thus in addition to their direct effects on the economy enforcement auditing and corruption can have indirect effects through their negative impact on adoption of productivity enhancing technologies that also increase operational transparency

quota hopping in bond diversion we show that the u s in bond system of imports may be used by firms to illegally avoid trade barriers a practice known as in bond diversion the illicit scheme involves declaring chinese exports bound for mexico but diverting them to the u s market while in transit thus creating a gap between chinese and mexican reports using the phaseout and removal of u s quotas at the end of the multifiber agreement as a policy experiment as well as variation in quota bindingness across products we show that quota bound products were associated with larger trade gaps which shrunk following the quota removals jel f13 o17 o19

nonfarm income diversification and household livelihood strategies in rural africa concepts dynamics and policy implications abstract asset activity and income diversification lie at the heart of livelihood strategies in rural africa this paper introduces a special issue on the topic income diversification and livelihoods in rural africa cause and consequence of change we concentrate on core conceptual issues that bedevil the literature on rural income diversification and the policy implications of the empirical evidence presented in this special issue

corruption trade costs and gains from tariff liberalization evidence from southern africa this paper exploits quasi experimental variation in tariffs in southern africa to estimate trade elasticities traded quantities respond only weakly to a 30 percent reduction in the average nominal tariff rate trade flow data combined with primary data on firm behavior and bribe payments suggest that corruption is a potential explanation for the observed low elasticities in contexts of pervasive corruption even small bribes can significantly reduce tariffs making tariff liberalization schemes less likely to affect the extensive and the intensive margins of firms import behavior the tariff liberalization scheme is however still associated with improved incentives to accurately report quantities of imported goods and with a significant reduction in bribe transfers from importers to public officials

taxation with costly administration the concept of a tax technology is used here as providing a unified framework for analyzing both administrative activity by tax authorities and tax resisting activity by taxpayers this framework provides a simple formalization of adam smith s four components of tax costs administration substitution active noncompliance and passive compliance the model is used to derive policy implications concerning the proper measurement of the cost of public funds and concerning the criterion for optimal administration

using evidence of household income diversification to inform study of the rural nonfarm labor market in africa abstract the labor market literature in developing countries has seldom drawn on the studies of rural household income diversification this paper draws on such studies to inform future study of the rural nonfarm labor market in africa the review of evidence provides some surprising departures from traditional images of nonfarm activities of rural households among the most striking is the dominant importance in the majority of case study areas of nonfarm wage labor as compared to self employment of nonfarm sector earnings as compared to farm sector wage earnings and of local nonfarm earnings as compared to migration earnings the most worrying finding was the poor distribution of nonfarm earnings in rural areas despite the importance of these earnings to food security and farm investments this poor distribution implies significant entry barriers and market segmentation it is probable that this will lead over time to an increasingly skewed distribution of land and other assets in rural africa

wto accession and tariff evasion abstract this study documents some unintended consequences of the world trade organization wto membership by providing evidence on displacement of tariff evasion driven by the wto accession process the analysis focuses on the wto customs valuation agreement cva which limits the discretion of customs officials when it comes to assessing the price of imports while prior to the wto accession customs officials are free to use their own judgment or apply minimum or reference prices after their country joined the wto they are mandated to accept the invoice price issued by the exporter if customs officials enjoy discretion with respect to assessing the import price they may assist importers with tariff evasion in exchange for bribes removing such discretion limits their ability to facilitate misrepresentation of import prices using data on 15 countries which joined the wto between 1996 and 2008 we find a positive relationship between underreporting of import prices and the tariff rate which is expected as the incentive to evade increases with the tariff rate importantly this relationship disappears after a country joins the wto this result is consistent with the cva closing one channel for corrupt behavior however we also find that changes to customs valuation procedures induce importers to seek alternative ways of tariff evasion such as underreporting of quantities and product misclassification the overall level of evasion remains unchanged

the optimal elasticity of taxable income abstract the strength of the behavioral response to a tax rate change depends on the environment individuals operate in and may be manipulated by instruments controlled by the government we first derive a measure of the social benefit to affecting this elasticity the paper then examines this effect in the solution to the optimal income taxation problem when such an instrument is available first in a general model and then in an example when the government chooses the income tax base

an econometric analysis of income tax evasion and its detection this article presents an econometric analysis of income tax evasion and its detection based on individual level data drawn from the internal revenue service 1982 and 1985 taxpayer compliance measurement programs i specify a model consisting of two equations the first measures the extent of evasion the second the fraction of evasion detected the empirical analysis explores the effects of income the marginal tax rate and various socioeconomic characteristics on filer evasion behavior and it assesses the variability in detection rates among irs examiners finally i use the empirical estimates to construct new estimates of the income tax gap the new estimates are very close to the previous irs estimates

tariffs enforcement and customs evasion evidence from india we examine the effect of tariff policies on evasion of customs duties in the context of the trade reform in india of the 1990s by exploiting the variation in tariff rates across time and products we identify a robust positive elasticity of evasion with respect to tariffs a second contribution of the paper is to provide some evidence on the impact of enforcement while we cannot identify the direct impact of enforcement on evasion we can establish the extent to which enforcement related factors such as product characteristics that determine the ease of detection of evasion affect the evasion elasticity the results render support to the hypothesis that improvements in enforcement can reduce the responsiveness of evasion to tariffs

the scramble in africa reorienting rural livelihoods abstract structural adjustment and market liberalization policies of the past 15 years have accelerated deagrarianization in sub saharan africa peasant producers have veered away from production of traditional export crops and commercial staple foods in rural areas remote from roads and urban markets nonagricultural income diversification has been substituted in the search for much needed cash earnings citing recent village survey evidence this paper argues that the economic restructuring of african smallholders work lives has been accompanied by deep rooted social change divisions of labor and decision making power within peasant households have altered and wealth differentiation between households has deepened depeasantization of the countryside is currently taking place as rural household members of both genders scramble for viable livelihoods

risk management of pensions from the perspective of loss aversion abstract this paper studies two interrelated questions first is a pay as you go payg pension component beneficial from a risk management point of view second does optimal risk management of old age consumption differ between different income groups the analysis is based on so called lexicographic loss aversion preferences interest in these preferences stems from the fact that they explain the cross section of individuals savings and asset allocation choices better than alternative models i find that all income groups benefit from the presence of a substantial payg component only for the two highest income quintiles old age provision should heavily rely on equity investments

beyond the poverty agenda insights from the new politics of development in uganda summary the politics of development has shifted significantly in recent years with largely negative implications for the poverty agenda this is particularly apparent in countries like uganda where poverty reduction papers have been displaced by national development plans aimed at structural transformation driven by the discovery of oil the growing influence of rising powers vis a vis traditional donors and domestic political shifts although this heralds the possibility of deeper national ownership over development policy international financial institutions have adopted strategies to maintain their influence moreover uganda currently lacks the underlying political capacities and relationships required to roll out this ambitious new agenda

the effect of tax enforcement on tax elasticities evidence from charitable contributions in france optimal tax formulas expressed in sufficient statistics are usually calibrated under the assumption that the relevant tax elasticities are unaffected by other available policy instruments in practice though tax authorities have many more instruments than the mere tax rates and tax elasticities are functions of all these policy instruments in this paper we provide evidence that tax elasticities are extremely sensitive to a particular policy instrument the level of tax enforcement we exploit a natural experiment that took place in france in 1983 when the tax administration tightened the requirements to claim charitable deductions the reform led to a substantial drop in the amount of contributions reported to the administration which can be credibly attributed to overreporting of charitable contributions before the reform rather than to a real change in giving behaviours we show that the reform was also associated with a substantial decline in the absolute value of the elasticity of reported contributions this finding allows us to partially identify the elasticity of overreporting contributions which is shown to be large and inferior to 2 in the lax enforcement regime we further show using bunching of taxpayers at kink points of the tax schedule that the elasticity of taxable income also experienced a significant decline after the reform our results suggest that optimizing the tax rate for a given tax elasticity when other policy instruments are not optimized can lead to misleading conclusions when tax authorities have another instrument that could set the tax elasticity itself at its optimal level as in kopczuk and slemrod 2002

can public private partnerships leverage private investment in agricultural value chains in africa a preliminary review summary public private partnerships ppps may be one way of increasing the level of private sector investment into poorly performing agricultural value chains this paper considers a range of ppp mechanisms that respond to different market failures affecting such chains and draws on principal agent theory to illustrate the challenges it reviews emerging experience with a number of these mechanisms along with experience from other sectors that may shed light on generic problems of implementing ppps in africa while finding some positive impacts on investment it notes that state failures can also undermine ppp effectiveness as the evidence base is still limited it calls on organizations promoting innovative ppps to disclose available information for critical examination

livelihood diversification in uganda patterns and determinants of change across two rural districts despite the continuing centrality of agriculture to the rural economy of uganda households engage in diverse livelihood strategies this paper presents findings of a two district study of the role of various factors that influence livelihood trends and strategies qualitative and quantitative analysis reveals differences according to wealth gender and between traditional and non traditional occupations comparisons drawn between the two districts kumi in the eastern region and rakai in the central region identify social and historical as well as contemporary levels of investment as the determinants of varying levels of livelihood diversification

why pay more corporate tax avoidance through transfer pricing in oecd countries this paper presents suggestive evidence of income shifting in response to differences in corporate tax rates for a large selection of oecd countries we use a new method to disentangle the income shifting effects from the effects of tax rates on real activity our baseline estimates suggest that a substantial share of the revenues from a unilateral increase in the corporate tax rate is lost because of a decline in reported income

tax rates and tax evasion evidence from missing imports in china tax evasion by its very nature is difficult to observe we quantify the effects of tax rates on tax evasion by examining the relationship in china between the tariff schedule and the evasion gap which we define as the difference between hong kong s reported exports to china at the product level and china s reported imports from hong kong our results imply that a one percentage point increase in the tax rate is associated with a 3 percent increase in evasion furthermore the evasion gap is negatively correlated with tax rates on closely related products suggesting that evasion takes place partly through misclassification of imports from higher taxed categories to lower taxed ones in addition to underreporting the value of imports

tax evasion under behavioral structures abstract we study the strategic interactions between the fiscal authority and the taxpayer regarding tax evasion and auditing we fit this interaction into a bayesian game and introduce the concept of behavioral consistency which helps reducing the number of available strategies and models the stylized fact according to which the choice to evade is subject to behavioral patterns

prospects for social security reform preface part i what is the social security problem 1 an overview of the issues 2 measuring solvency in the social security system 3 criteria for evaluating social security reform 4 new opportunities for the social security system part ii assessing the economic impact of social security 5 social security money s worth 6 simulating benefit levels under alternative social security reforms 7 stochastic simulation of economic growth effects 8 thinking about social security s trust fund 9 government guarantees for old age income 10 means testing social security 11 social security and employer induced retirement part iii political and practical considerations regarding social security reform 12 compliance in social security systems around the world 13 employer responses to social security reform 14 an actuarial perspective on how social security reform could influence employer sponsored pensions 15 an organized labor perspective on social security reform 16 women as widows under a reformed social security system 17 investment and administrative constraints on individual social security accounts 18 americans views of social security and social security reforms contributors index

intergenerational risk shifting through social security and bailout politics abstract this paper adopts a stochastic overlapping generations framework to analyze the allocation of aggregate financial risks under different social security systems and a majority voting rule we study whether there will be switches between pay as you go payg and fully funded ff systems in such an economy we show that in case of a negative aggregate shock low income young individuals will form a political coalition with the elderly to implement a payg system payg scheme is shown to persist even after a good aggregate shock if the system is redistributive enough

the rural non farm sector issues and evidence from developing countries abstract the rural non farm sector has traditionally been viewed as a low productivity sector which produces low quality goods it is often expected to wither away as a country develops recent years have seen a shift away from this position towards recognition that the rural non farm sector can and often does contribute to economic growth rural employment poverty reduction and a more spatially balanced population distribution this paper reviews the literature on the conceptual and empirical underpinnings of this more recent perspective focussing on the experience in developing countries the paper documents the size and heterogeneity of the sector pointing to evidence that in many countries the sector is expanding rather than declining the issues associated with measuring the sector s economic contribution are discussed followed by empirical assessments for several countries and regions the distributional impact of non farm earnings is examined and it is found that a pro poor impact while by no means inevitable can be considerable the sector s trajectory over time in different settings is reviewed and the scope for and experience of various policy interventions is discussed

agricultural tradables and economic recovery in uganda the limitations of structural adjustment in practice abstract uganda s economic reform program has been widely regarded as a success story for structural adjustment nevertheless a large trade deficit persists shored up by inflows of aid and private remittances the poor performance of the agricultural tradables sector is presented as the key explanation for this trade imbalance two main reasons for this poor performance are found to be the failure to liberalize producer prices quickly and the failure to overcome early institutional resistance to reforms of marketing arrangements uganda s recovery is therefore much less impressive than it appears and the sustainability of the now heavily aid dependent economy must remain in serious doubt

balancing rural poverty reduction and citizen participation the contradictions of uganda s decentralization program abstract uganda s ambitious decentralization program is analyzed in terms of a dual mode system of local governance under a technocratic mode conditional funding from the center is earmarked for particular programs but with little local participation in contrast the patronage mode is an elaborate system for local bottom up planning but with limited resources which are largely consumed in administrative costs and political emoluments along with the spoils of a committee system controlling contracts and appointments these resources provide the means for building political alliances and loyalty in the absence of a culture of transparency and civic engagement to assure downward accountability it remains to be seen whether decentralization can promote both efficient service delivery and local empowerment simultaneously

political connections and tariff evasion evidence from tunisia are politically connected firms more likely to evade taxes this paper presents evidence suggesting firms owned by president ben ali and his family were more prone to evade import tariffs during ben ali s reign evasion gaps defined as the difference between the value of exports to tunisia reported by partner countries and the value of imports reported at tunisian customs were correlated with the import share of connected firms this association was especially strong for goods subject to high tariffs and driven by underreporting of unit prices which diminished after the revolution consistent with these product level patterns unit prices reported by connected firms were lower than those reported by other firms and declined faster with tariffs than those of other firms moreover privatization to the ben ali family was associated with a reduction in reported unit prices whereas privatization per se was not

income tax compliance in india an empirical analysis abstract aggregate data are used to study determinants of income tax revenues and taxpayer compliance in india during 1965 1966 to 1992 1993 the estimates show that both revenues collected and compliance were significantly affected by tax structure marginal tax rates and exemption limit in addition inflation as well as declining assessment intensity had a significant negative effect while traditional enforcement tools searches penalties and prosecution activity had only a limited effect best practice enforcement assessment and tax structure policies could have yielded at most a 90 revenue increase leaving india s income tax performance below the average of countries with similar gdp per capita thorough reform of tax administration is therefore needed to raise income tax collection in india to international standards

what does the show case show evidence of and lessons from adjustment in uganda abstract uganda is often seen as an african show case for the beneficial effects of structural adjustment high growth rates have been combined with a high degree of ownership of the reforms at the same time critics have pointed to continued aid dependence and limited growth of the important agricultural export sector the contribution of this paper to this debate is three fold first ownership has not always been exemplary and is still fragile in some respects second although aid has indeed been important for bringing about high growth aid dependence has diminished over time third there have been real supply responses from the agricultural export sector

evasion behaviors of exporters and importers evidence from the u s china trade data discrepancy abstract since the late 1990s reported u s imports from china and hong kong have regularly and increasingly exceeded reported exports of china and hong kong to the united states this discrepancy which is not caused by re exporting through hong kong varies by product categories and in some cases takes the opposite sign in this paper we focus on china s direct exports to the united states using a model that allows for simultaneous misreporting to two authorities we find strong statistical evidence of under reporting exports at the chinese border to avoid paying value added tax vat the value of vat avoided is estimated at 6 5 billion during 2002 2008 and the associated understatements account for approximately two thirds of the discrepancy we also provide evidence of tariff evasion at the u s border in particular for related party transactions and indirect evidence of transfer pricing and evasion of chinese capital controls an estimated 2 billion of u s tariff revenue is lost due to such evasion during 2002 2008 which reduces the apparent size of the statistical discrepancy

estimating border tax evasion in mozambique abstract the relationship between border tax rates and evasion is examined for mozambique using the methodology developed by fisman and wei 2004 we find that high tax rates are associated with high levels of under reporting of import values and that tax rates have a strong and positive effect on tax evasion results also strongly confirm the presence of fraudulent classification of merchandise into lower taxed product categories finally analysis of the revenue implications of lower trade taxes finds that the revenue curve is quite flat but remains upward sloping with respect to the tax rate when only evasion is considered

the optimal mix between funded and unfunded pension systems when people care about relative consumption the paper studies the optimal portfolio mix between funded and unfunded pension systems when people care about relative consumption in pay as you go systems with fixed contribution rates pensions are tied to wages this lowers the uncertainty of individuals future relative position thereby increasing the attractiveness of unfunded systems the paper shows analytically that the optimal share of funding decreases with the importance of relative standing a calibrated version of the model suggests that the concern for relative standing has also a quantitatively important impact on the optimal share of funding for reasonable assumptions it is typically around 20

opting out of social security abstract the liability facing a pay as you go social security system can be calculated in several ways many conversions including that which took place in chile and in many plans to convert the u s system assume the largest measure known as the shutdown liability this measure pays many workers who have contributed to the public system more money than the public system is actually worth to them thereby placing a larger burden on future generations but other liability measures are hard to implement due to an information asymmetry between the government and individuals about an individual s skill level this paper demonstrates that a very simple reform plan simply letting people opt out of social security generates a truthful revelation equilibrium in which agents reveal private information about their skill levels the new assumed liability measure is much smaller since it more accurately assigns a liability to each individual a smaller liability therefore is passed onto future generations which also generates quicker transition paths it also does a better job protecting the welfare of the initial elderly when general revenue is used to pay for the transition simulation evidence is provided using a large scale lifecycle model with heterogeneous skill levels

blending top down federalism with bottom up engagement to reduce inequality in ethiopia donors increasingly fund interventions to counteract inequality in developing countries where they fear it can foment instability and undermine nation building efforts to succeed aid relies on the principle of upward accountability to donors but federalism shifts the accountability of subnational officials downward to regional and local voters what happens when aid agencies fund anti inequality programs in federal countries does federalism undermine aid does aid undermine federalism or can the political and fiscal relations that define a federal system resolve the contradiction internally this study explores this paradox via the promotion of basic services program in ethiopia the largest donor financed investment program in the world using an original panel database comprising the universe of ethiopian woredas districts the study finds that horizontal geographic inequality decreased substantially donor financed block grants to woredas increased the availability of primary education and health care services in the bottom 20 percent of woredas weaker evidence from household surveys suggests that vertical inequality across wealth groups within woredas also declined implying that individuals from the poorest households benefit disproportionately from increasing access to and utilization of such services the evidence suggests that by combining strong upward accountability over public investment with extensive citizen engagement on local issues ethiopia s federal system resolves the instrumental dissonance posed by aid funded programs to combat inequality in a federation

redistribution when avoidance behavior is heterogeneous abstract the optimal income taxation framework is extended to account for heterogeneity in avoidance behavior the optimal tax formulae are shown to be simply and intuitively modified to reflect the value of taxable income as an indicator of the need for transfers at a given skill level this effect is in addition to any effect implied by just considering additional margins of response to taxes alternative sources of heterogeneity and their likely consequences are discussed when the choice of administration is added to the model it is demonstrated that the optimal tax system may include some seemingly wasteful avoidance schemes even if they could be eliminated without any cost when an avoidance scheme is more heavily used by the needy it may provide additional redistribution without affecting standard incentive constraints

fixing the leak in okun s bucket optimal tax progressivity when avoidance can be controlled this paper examines optimal income tax progressivity when avoidance responses to taxation are important and can be controlled at some cost by the government a simple example shows that ignoring the fact that avoidance can be controlled that the leak in okun s bucket can be fixed can lead to misleading implications about the optimal degree of tax rate progressivity the paper then generalizes the standard modei of the optimal linear income tax to include taxpayer avoidance behavior and the ability of government to control the avoidance but not the labor supply response to higher marginal tax ites the discussion suggests that if the tax burden is to be made more progressive base broadening and increased enforcement ought to be considered as alternatives or complements to increasing tax rates for high income individuals

capital flight to germany two alternative measures abstract we use two measures to study two capital flight channels for germany one measure is based on the concept of trade misinvoicing and one on net claims and liabilities in the eurosystem of central banks for both measures we propose refinements to enhance the assessment of capital flight we find that capital flight towards germany via these two channels has been quite sizable in the recent decade and can tally to about 2 of gdp annually regarding their determinants we show that the two capital flight measures are driven by both common and measure specific factors traditional determinants such as covered interest differentials only play a limited role while crisis specific factors such as economic policy uncertainty the ecb collateral policy as well as currency misalignment are driving factors of the investors apparent flight to safety behavior

right target wrong mechanism agricultural modernization and poverty reduction in uganda summary household consumption surveys suggest that the downward trend in rural poverty indicators recorded in uganda during the 1990s has been reversed since 2000 this paper examines the ugandan government s strategy to reduce rural poverty the plan for modernization of agriculture pma it argues that while there appear few better choices of target for the pma than to improve incomes of the rural poor through increased agricultural productivity emphasis on decentralization as a mechanism for poverty reduction is misplaced in the current political context of uganda the paper considers what alternative mechanisms might better deliver reductions in rural poverty

tax bases tax rates and the elasticity of reported income abstract tax reforms usually change both tax rates and tax bases using a panel of income tax returns spanning the two major u s tax reforms of the 1980s and a number of smaller tax law changes i find that the elasticity of income reported on personal income tax returns depends on the available deductions this highlights that this key behavioral elasticity is not an immutable parameter but rather that it can be to some extent controlled by policy makers one implication is that base broadening reduces the marginal efficiency cost of taxation the results are very similar for all income categories indicating that the rich are more responsive to tax rates because tax rules that apply to them are different their tax base is narrower the point estimates indicate that the tax reform act of 1986 reduced the marginal cost of collecting a dollar of tax revenue with roughly half of this reduction due to the base broadening and the other half due to the tax rate reduction as a by product the analysis in this paper offers a reconciliation of disparate estimates obtained by previous studies of the tax responsiveness of income

building state capacity evidence from biometric smartcards in india anti poverty programs in developing countries are often dicult to implement in particular many governments lack the capacity to deliver payments securely to targeted beneciaries we evaluate the impact of biometrically authenticated payments infrastructure smartcards on beneciaries of employment nregs and pension ssp programs in the indian state of andhra pradesh using a large scale experiment that randomized the rollout of smartcards over 158 subdistricts and 19 million people we nd that while incompletely implemented the new system delivered a faster more predictable and less corrupt nregs payments process without adversely aecting program access for each of these outcomes treatment group distributions rst order stochastically dominated those of the control group the investment was cost eective as time savings to nregs beneciaries alone were equal to the cost of the intervention and there was also a signicant reduction in the leakage of funds between the government and beneciaries in both nregs and ssp programs beneciaries overwhelmingly preferred the new system for both programs overall our results suggest that investing in secure payments infrastructure can signicantly enhance state capacity to implement welfare programs in developing countries

making reform work institutions dispositions and the improving health of bangladesh we examine whether local governance can improve social development empirically using good and bad cases of public health outcomes in bangladesh we explore the institutional underpinnings of service provision digging down beneath the rules of the game to analyze the beliefs understandings and dispositions that drive social behavior changes in deep social attitudes led to improvements in social indicators regional variation in health outcomes is explained by the presence or absence of a dense web of relationships that enmeshed reformers in local systems of authority and legitimacy strengthening their actions and making local society more susceptible to change

tariff rates tariff revenue and tariff reform some new facts this article compares the statutory and valorem tariff rates official rates with the ratio of tariff revenues to import values collected rates for jamaica kenya and pakistan it identifies four general features of the tariff codes considers whether these features apply to all developing countries and discusses four implications of these features for tariff reform first the collected rate for any given item in the tariff code is only weakly related to the official rate for the item second the variation of collected rates on average increase much less than the official rates fourth the relation between official rates and collected rates is nonlinear because the slope is lower at higher levels of the official rate

government asset and liability management in an era of vanishing public debt the paper examines alternative options for managing public debt and public assets in a government balance sheet framework that includes the treasury the federal reserve and social security even after september 11 u s fiscal policy is on a trajectory to accumulate substantial uncommitted funds the paper examines how such funds should be invested i conclude that high quality fixed income securities are the best benchmark and that social security is the most appropriate government asset manager the analysis of policy alternatives reveals a trilemma between maintaining a liquid treasury market minimizing rent seeking and facilitating intergenerational risk sharing

integrity for hire an analysis of a widespread customs reform abstract can governments improve bureaucratic performance by hiring integrity from the private sector in the past 2 decades a number of developing countries have hired private firms to conduct preshipment inspections of imports generating independent data on the value and tariff classification of incoming shipments i find that countries implementing such inspection programs subsequently experience large increases in import duty collections by contrast the growth rate of other tax revenues does not change appreciably additional evidence suggests that declines in falsification of import documentation are behind the import duty improvements the programs also lead to declines in undervaluation and misreporting of goods classifications historically this hired integrity appears to have been cost effective with improvements in import duty collections in the first 5 years of a typical inspection program amounting to 2 6 times the program s costs

non farm income gender and inequality evidence from rural ghana and uganda abstract this paper examines how the distribution of earnings in rural ghana and uganda differs by income type and by gender we find that non farm earnings contribute to rising inequality but that lower income groups also benefit due to strong overall growth in non farm earnings the inequality inducing effect is driven by self employment income wage income on the other hand reduces inequality the tendency of non farm income to contribute to inequality is greater among female headed households for whom self employment is important and non farm opportunities more constrained determinants of non farm income are estimated and appear to be strongly related to location education age and distance to market estimates of the linkages to agriculture in ghana are weaker than expected showing the non farm sector to be functioning more as an alternative activity to agriculture than as a complement