Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse

Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse

Why is governance in resource-rich countries so poor This paper argues that it is because governments in these countries do not rely on taxation, which is an important instrument for citizens to hold their governments accountable. Using a game-theo...

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Main Authors: Devarajan, Shantayanan, Do, Quy-Toan
Format: Working Paper
Language:English
Published: World Bank, Washington, DC 2021
Subjects:
NATURAL RESOURCE CURSE
TAXATION
ACCOUNTABILITY
CREDIBLE COMMITMENT
CASH TRANSFERS
GAME THEORY
Online Access:http://documents.worldbank.org/curated/undefined/152821639419544854/Taxation-Accountability-and-Cash-Transfers-Breaking-the-Resource-Curse
http://hdl.handle.net/10986/36738
id okr-10986-36738
recordtype oai_dc
spelling okr-10986-367382021-12-17T05:10:53Z Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse Devarajan, Shantayanan Do, Quy-Toan NATURAL RESOURCE CURSE TAXATION ACCOUNTABILITY CREDIBLE COMMITMENT CASH TRANSFERS GAME THEORY Why is governance in resource-rich countries so poor This paper argues that it is because governments in these countries do not rely on taxation, which is an important instrument for citizens to hold their governments accountable. Using a game-theoretic model, the authors show that the combination of low taxes and weak governance can be an equilibrium in an economy with sizeable mineral revenues. As income from natural resources ultimately declines, replacing it with tax revenues may require governments to give control of these proceeds to citizens, in the form of cash transfers say, as a credible commitment to accountability, thereby breaking the country out of its resource curse. 2021-12-16T16:19:05Z 2021-12-16T16:19:05Z 2021-12 Working Paper http://documents.worldbank.org/curated/undefined/152821639419544854/Taxation-Accountability-and-Cash-Transfers-Breaking-the-Resource-Curse http://hdl.handle.net/10986/36738 English Policy Research Working Paper;No. 9880 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
topic NATURAL RESOURCE CURSE
TAXATION
ACCOUNTABILITY
CREDIBLE COMMITMENT
CASH TRANSFERS
GAME THEORY
spellingShingle NATURAL RESOURCE CURSE
TAXATION
ACCOUNTABILITY
CREDIBLE COMMITMENT
CASH TRANSFERS
GAME THEORY
Devarajan, Shantayanan
Do, Quy-Toan
Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
relation Policy Research Working Paper;No. 9880
description Why is governance in resource-rich countries so poor This paper argues that it is because governments in these countries do not rely on taxation, which is an important instrument for citizens to hold their governments accountable. Using a game-theoretic model, the authors show that the combination of low taxes and weak governance can be an equilibrium in an economy with sizeable mineral revenues. As income from natural resources ultimately declines, replacing it with tax revenues may require governments to give control of these proceeds to citizens, in the form of cash transfers say, as a credible commitment to accountability, thereby breaking the country out of its resource curse.
format Working Paper
author Devarajan, Shantayanan
Do, Quy-Toan
author_facet Devarajan, Shantayanan
Do, Quy-Toan
author_sort Devarajan, Shantayanan
title Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
title_short Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
title_full Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
title_fullStr Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
title_full_unstemmed Taxation, Accountability, and Cash Transfers : Breaking the Resource Curse
title_sort taxation, accountability, and cash transfers : breaking the resource curse
publisher World Bank, Washington, DC
publishDate 2021
url http://documents.worldbank.org/curated/undefined/152821639419544854/Taxation-Accountability-and-Cash-Transfers-Breaking-the-Resource-Curse
http://hdl.handle.net/10986/36738
_version_ 1764485803496439808

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