Country risk spreads are larger because these economies are structurally more vulnerable to external shocks. They are more volatile because this vulnerability, and the options an emerging country has to face it, is constantly reevaluated by financial markets. No feasible TT rate would be capable of really stabilizing such kinds of speculation. This does not mean, of course, that one should throw the arms in despair and let the markets operate freely. Far from it, the problem is not that markets know best, it is that a TT is far too little.
Capital controls are the effective way to protect emerging economies from external vulnerability.
An alternative aim for a TT is to raise money. In this case, one has to consider two possibilities, that are not really exclusive. A TT can be thought of as a kind of international tax, raised by some supranational organism, or as national taxes administered by the countries where the operations are made. Of course, an international tax would face many difficulties, beginning with questions of sovereignty and leading all the way down to the question of who would collect and distribute the revenues from the tax. In a passing remark during the 1999 financial crisis of Brazil, President Cardoso indicated that a TT could do some good and then added that the IMF could manage it.