High rates of inflation cause negative real interest rates and discourage savings and investment. Also, government deficit take money away from private investment. Pinochet took control of Chile in a 1973 coup. The result was growth in GDP with lower inflation, but also increase in income inequality. Many households are engaged in subsistence agriculture and don't have a money income.
Literacy rates are low, making it difficult for people to fill out forms.
Tax evasion is a problem in many developing countries. Corruption of government administrators makes taxes hard to collect. Choose ONE of the following TWO essays. Give a complete answer. Include as many specifics as you can.