Though traditionally thought of as the preserve of technical experts—lawyers, economists and accountants—the study of taxation has recently attracted growing attention, with mounting recognition that taxation is fundamentally political, and lies near the core of the relationship between states and citizens. The first, and most common, question about the politics of taxation is: what are the political barriers to more effective and equitable taxation, and how can these political barriers may be overcome? However, it is important that any discussion of the politics of taxation also consider a second question: How can the expansion of tax collection be linked to the construction of stronger fiscal contracts, thus ensuring responsiveness and accountability in the use of tax revenues? The expansion of taxation represents a transfer of wealth from private citizens to the state, but becomes publicly desirable only if it is then consistently translated in improvements in publicly provided goods and services, and broader improvements in the quality of governance. This makes it incumbent on those interested in taxation to consider not only how best to raise additional revenue, but how best to raise additional revenue in ways that increase the likelihood that new revenue will be translated into broader public benefits.
It is now widely accepted that in many cases political resistance represents the most important barrier to more effective taxation in Africa—particularly with respect to the taxation of elite groups. This, in turn, reflects two broad political challenges: the expansion of taxation frequently confronts resistance from influential political and economic elites, while it has historically been very difficult to build popular coalitions in favor of taxation in contexts of limited transparency and significant distrust of taxation and the state. That said, recent research has shed growing light on the contexts in which reform is more likely, and the reform strategies that may contribute to overcoming political resistance. This has been accompanied by the growth of parallel research that has highlighted the contexts in which the expansion of taxation is most likely to spur public mobilization and demand-making—and thus the strategies that reformers might adopt in seeking to strengthen the links between revenue-raising and improvements in public services and accountability. Ultimately, it increasingly appears that the kinds of political strategies that can support more effective and equitable taxation are also likely to contribute to encouraging encourage expanded popular engagement and stronger links between taxation and public benefits. These include efforts to stress horizontal equity in tax collection, to expand transparency and popular engagement in tax debates and to more clearly link expanded revenue to specific public uses, in order to build popular support for reform. Such strategies have the potential to contribute to virtuous circles of reform in which new taxation is translated into valued public benefits; thus building popular support for the further expansion of more equitable taxation.
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The Democratic Dividend: Public Spending and Education Under Multipartyism
Robin Harding
A substantial body of scholarship has considered the impact of regime types on public spending and basic service provision, much of which has implications for education. While some of the theoretical and empirical conclusions from this work are globally applicable, there are also important ways in which the relationship between democracy and education may be influenced by the African context. The most useful theoretical arguments for why democracy may influence public spending, and spending on education in particular, focus on the political incentives generated by multiparty electoral competition. Related but distinct arguments focus on how this may impact in turn on education outcomes, and on why these dynamics may vary because of factors that are particularly pertinent in many African countries. These include variations in the degree of electoral competitiveness and political competition as well as in levels of economic development and ethnic fractionalization. A large body of empirical evidence investigates these various arguments, evaluating the impact of democracy on both education spending and education outcomes. Although evidence for the positive impact of democracy on education is compelling, evidence for this relationship in Africa remains limited and is hampered by limitations to data. In particular, although evidence suggests democracy may have a positive impact on access to education in Africa, there is less evidence for its impact on the quality of education. Future work should continue to address these issues while seeking to investigate sources of heterogeneity in the impact of democracy on education in Africa.
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Peter M. Lewis
In the era following the decolonization of Africa, the economic performance of countries on the continent can be traced across three periods. The early postindependence years reflected moderate growth and policy variation, with occasional distress in some countries. From the 1980s through the late 1990s, the region was gripped by a sweeping crisis of growth and solvency shaped by a steep economic downturn and a slow, stuttering recovery. This was also a period of convergence and restrictions on policy space. By the early 2000s, accelerated growth buoyed most economies in Africa, although commodity price shocks and the global economic slump of 2008–2009 created episodic problems. Different approaches to policy and strategy once again marked the landscape. A number of influences help to explain variations in the occurrence of economic crisis across Africa, and the different responses to economic distress. In addition to structural factors, such as geography, resource wealth, and colonial legacies, middle-range political conditions contributed to these downturns. Key institutions, core constituencies, and fiscal pressures were domestic causes and external factors include donor convergence, access to finance, and policy learning.
One framework of analysis centers on three factors: ruling coalitions, the fiscal imperative, and policy space. The ruling coalition refers to the nature of the political regime and core support groups. The fiscal imperative refers to the nature of state finance and access to external resources. And the policy space comprises the range of strategic alternatives and the latitude for governments to make choices among broad policy options. Applying the framework to Africa’s economic performance, the first period was marked by distributional imperatives, a flexible fiscal regime, and considerable space for policy experimentation. During the long crisis, regimes came under pressure from external and domestic influences, and shifted toward a focus on macroeconomic stabilization. This occurred under a tight fiscal imperative and a contraction of policy space under the supervision of multilateral financial institutions. In the 2000s, governments reflected a greater balance between distributional and developmental goals, fiscal constraints were somewhat relaxed, and policy variation reappeared across the region. While the early 21st century has displayed signs of intermittent distress, Africa is not mired in a crisis comparable to those of earlier periods. Developmental imperatives and electoral accountability are increasingly influential in shaping economic strategy across the continent.
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Catherine Boone
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