Public Finance and Economic Development : Reflections Based on the Experience in China
Low tax revenue and slow economic growth are two central concerns in developing countries. However, policies that raise tax revenue also harm economic growth. With tax revenue coming mainly from large capital-intensive firms, and with a large infor...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/493491468151473073/Public-finance-and-economic-development-reflections-based-on-the-experience-in-China http://hdl.handle.net/10986/28023 |
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okr-10986-28023 |
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oai_dc |
| repository_type |
Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
AGRICULTURE ALLOCATION OF CREDIT BANK DEPOSITS BARRIERS TO ENTRY BENEFICIARIES CAPITAL INVESTMENT CASH ECONOMY CASH TRANSACTIONS CHECKS COMMODITY CONFIDENCE OF INVESTORS CONSUMPTION TAXES CONVERSIONS CORPORATE INCOME TAX CORPORATE INCOME TAXES CREDIBILITY CREDIT CARDS CRITICAL INFRASTRUCTURE CURRENCY DEBT DEFICITS DEFLATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DISCOUNT RATE DISTRIBUTION OF WEALTH DOMESTIC MARKET ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC DOWNTURN ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC LOSS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMICS LITERATURE ENVIRONMENTAL BENEFITS EVASION EXCISE TAX EXCISE TAXES EXISTING INFRASTRUCTURE EXPENDITURE EXTERNALITIES FINANCIAL CRISIS FINANCIAL SECTOR FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FLOWS OF CAPITAL FORECASTS FOREIGN COMPETITION FOREIGN EXCHANGE FOREIGN OWNERS FREE TRADE FUTURE GROWTH GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT FINANCES GOVERNMENT POLICIES GOVERNMENT REVENUE GROWTH RATES GROWTH THEORY IMPLICIT TAX INCOME INCOME TAX INCOME TAXES INCOMES INDIRECT TAXATION INFLATION INFLATION RATE INFLATION RATES INFORMAL ECONOMY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL TRADE LENDERS LEVEL OF DEBT LEVEL OF INFLATION LICENSES LOAN MACROECONOMIC ENVIRONMENT MARGINAL COST MARKET INTEREST MARKET INTEREST RATE MARKET PRICES MARKET REFORM MARKET REFORMS MONETARY POLICY MONOPOLY NATURAL RESOURCES NEW MARKET NEW MARKET OPPORTUNITIES NEW PRODUCTS NOMINAL INTEREST RATE OPTIMAL TAXATION OUTPUT POLICY RESPONSE POLITICAL ECONOMY POLITICAL STABILITY POLITICAL SYSTEMS PREFERENTIAL ACCESS PRIVATE FINANCING PRIVATIZATION PROBABILITY OF DEFAULT PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC POLICY RAPID ECONOMIC GROWTH RAPID GROWTH RATE OF INVESTMENT REAL GDP REAL GROWTH RATE REAL INTEREST REAL INTEREST RATE REGISTRATION FEES REPAYMENT RESTRICTED FOREIGN OWNERSHIP RESTRICTIONS ON ENTRY RETURN ROADS SKILLED WORKERS TARIFF REVENUE TARIFF REVENUES TAX TAX BASE TAX CHANGES TAX COLLECTION TAX COMPLIANCE TAX EVASION TAX POLICIES TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX STRUCTURE TAX STRUCTURES TAX SYSTEM TAXATION TELECOMMUNICATIONS TRADE BARRIERS TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADES TRADING TRANSACTION TRANSFER PAYMENTS TRANSFER TAXES TURNOVER TURNOVER TAXES UTILITIES UTILITY FUNCTION VOLATILITY WAGES |
| spellingShingle |
AGRICULTURE ALLOCATION OF CREDIT BANK DEPOSITS BARRIERS TO ENTRY BENEFICIARIES CAPITAL INVESTMENT CASH ECONOMY CASH TRANSACTIONS CHECKS COMMODITY CONFIDENCE OF INVESTORS CONSUMPTION TAXES CONVERSIONS CORPORATE INCOME TAX CORPORATE INCOME TAXES CREDIBILITY CREDIT CARDS CRITICAL INFRASTRUCTURE CURRENCY DEBT DEFICITS DEFLATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DISCOUNT RATE DISTRIBUTION OF WEALTH DOMESTIC MARKET ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC DOWNTURN ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC LOSS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMICS LITERATURE ENVIRONMENTAL BENEFITS EVASION EXCISE TAX EXCISE TAXES EXISTING INFRASTRUCTURE EXPENDITURE EXTERNALITIES FINANCIAL CRISIS FINANCIAL SECTOR FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FLOWS OF CAPITAL FORECASTS FOREIGN COMPETITION FOREIGN EXCHANGE FOREIGN OWNERS FREE TRADE FUTURE GROWTH GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT FINANCES GOVERNMENT POLICIES GOVERNMENT REVENUE GROWTH RATES GROWTH THEORY IMPLICIT TAX INCOME INCOME TAX INCOME TAXES INCOMES INDIRECT TAXATION INFLATION INFLATION RATE INFLATION RATES INFORMAL ECONOMY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL TRADE LENDERS LEVEL OF DEBT LEVEL OF INFLATION LICENSES LOAN MACROECONOMIC ENVIRONMENT MARGINAL COST MARKET INTEREST MARKET INTEREST RATE MARKET PRICES MARKET REFORM MARKET REFORMS MONETARY POLICY MONOPOLY NATURAL RESOURCES NEW MARKET NEW MARKET OPPORTUNITIES NEW PRODUCTS NOMINAL INTEREST RATE OPTIMAL TAXATION OUTPUT POLICY RESPONSE POLITICAL ECONOMY POLITICAL STABILITY POLITICAL SYSTEMS PREFERENTIAL ACCESS PRIVATE FINANCING PRIVATIZATION PROBABILITY OF DEFAULT PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC POLICY RAPID ECONOMIC GROWTH RAPID GROWTH RATE OF INVESTMENT REAL GDP REAL GROWTH RATE REAL INTEREST REAL INTEREST RATE REGISTRATION FEES REPAYMENT RESTRICTED FOREIGN OWNERSHIP RESTRICTIONS ON ENTRY RETURN ROADS SKILLED WORKERS TARIFF REVENUE TARIFF REVENUES TAX TAX BASE TAX CHANGES TAX COLLECTION TAX COMPLIANCE TAX EVASION TAX POLICIES TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX STRUCTURE TAX STRUCTURES TAX SYSTEM TAXATION TELECOMMUNICATIONS TRADE BARRIERS TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADES TRADING TRANSACTION TRANSFER PAYMENTS TRANSFER TAXES TURNOVER TURNOVER TAXES UTILITIES UTILITY FUNCTION VOLATILITY WAGES Gordon, Roger H. Public Finance and Economic Development : Reflections Based on the Experience in China |
| geographic_facet |
East Asia and Pacific China |
| relation |
Commission on Growth and Development Working Paper;No. 61 |
| description |
Low tax revenue and slow economic growth
are two central concerns in developing countries. However,
policies that raise tax revenue also harm economic growth.
With tax revenue coming mainly from large capital-intensive
firms, and with a large informal sector, policies that aid
large firms and policies that discourage entry of new firms
both help increase tax revenue. Entrepreneurial activity as
a result is discouraged, lowering growth. There is a basic
tension in policy design between current tax revenue and
economic growth. In fact, a loss in tax revenue can itself
reduce growth, due to less spending on education and
infrastructure. It can also undermine political support for
the reforms from the poor and from government bureaucrats,
both of whom are key beneficiaries of government
expenditures. What policies encourage growth without undue
loss of current expenditures? One is debt finance, but this
creates the risk of a financial crisis if tax revenue rises
too slowly to repay this debt. A second is user fees, but
such fees still undermine political support from the poor. A
third is partial reform, maintaining both higher taxes on
and some protection for easily taxed firms, even while
barriers to entry are eased. |
| format |
Working Paper |
| author |
Gordon, Roger H. |
| author_facet |
Gordon, Roger H. |
| author_sort |
Gordon, Roger H. |
| title |
Public Finance and Economic Development : Reflections Based on the Experience in China |
| title_short |
Public Finance and Economic Development : Reflections Based on the Experience in China |
| title_full |
Public Finance and Economic Development : Reflections Based on the Experience in China |
| title_fullStr |
Public Finance and Economic Development : Reflections Based on the Experience in China |
| title_full_unstemmed |
Public Finance and Economic Development : Reflections Based on the Experience in China |
| title_sort |
public finance and economic development : reflections based on the experience in china |
| publisher |
World Bank, Washington, DC |
| publishDate |
2017 |
| url |
http://documents.worldbank.org/curated/en/493491468151473073/Public-finance-and-economic-development-reflections-based-on-the-experience-in-China http://hdl.handle.net/10986/28023 |
| _version_ |
1764465561984565248 |
| spelling |
okr-10986-280232021-04-23T14:04:45Z Public Finance and Economic Development : Reflections Based on the Experience in China Gordon, Roger H. AGRICULTURE ALLOCATION OF CREDIT BANK DEPOSITS BARRIERS TO ENTRY BENEFICIARIES CAPITAL INVESTMENT CASH ECONOMY CASH TRANSACTIONS CHECKS COMMODITY CONFIDENCE OF INVESTORS CONSUMPTION TAXES CONVERSIONS CORPORATE INCOME TAX CORPORATE INCOME TAXES CREDIBILITY CREDIT CARDS CRITICAL INFRASTRUCTURE CURRENCY DEBT DEFICITS DEFLATION DEVELOPING COUNTRIES DEVELOPING ECONOMIES DISCOUNT RATE DISTRIBUTION OF WEALTH DOMESTIC MARKET ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC DOWNTURN ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC LOSS ECONOMIC REFORM ECONOMIC REFORMS ECONOMIC RESEARCH ECONOMICS LITERATURE ENVIRONMENTAL BENEFITS EVASION EXCISE TAX EXCISE TAXES EXISTING INFRASTRUCTURE EXPENDITURE EXTERNALITIES FINANCIAL CRISIS FINANCIAL SECTOR FISCAL DEFICIT FISCAL POLICIES FISCAL POLICY FLOWS OF CAPITAL FORECASTS FOREIGN COMPETITION FOREIGN EXCHANGE FOREIGN OWNERS FREE TRADE FUTURE GROWTH GDP GDP PER CAPITA GLOBALIZATION GOVERNMENT DEBT GOVERNMENT EXPENDITURES GOVERNMENT FINANCES GOVERNMENT POLICIES GOVERNMENT REVENUE GROWTH RATES GROWTH THEORY IMPLICIT TAX INCOME INCOME TAX INCOME TAXES INCOMES INDIRECT TAXATION INFLATION INFLATION RATE INFLATION RATES INFORMAL ECONOMY INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE INVESTMENTS INFRASTRUCTURE PROJECTS INTEREST RATE INTERNATIONAL BANK INTERNATIONAL DEVELOPMENT INTERNATIONAL ECONOMICS INTERNATIONAL FINANCE INTERNATIONAL TRADE LENDERS LEVEL OF DEBT LEVEL OF INFLATION LICENSES LOAN MACROECONOMIC ENVIRONMENT MARGINAL COST MARKET INTEREST MARKET INTEREST RATE MARKET PRICES MARKET REFORM MARKET REFORMS MONETARY POLICY MONOPOLY NATURAL RESOURCES NEW MARKET NEW MARKET OPPORTUNITIES NEW PRODUCTS NOMINAL INTEREST RATE OPTIMAL TAXATION OUTPUT POLICY RESPONSE POLITICAL ECONOMY POLITICAL STABILITY POLITICAL SYSTEMS PREFERENTIAL ACCESS PRIVATE FINANCING PRIVATIZATION PROBABILITY OF DEFAULT PUBLIC PUBLIC ECONOMICS PUBLIC EXPENDITURE PUBLIC EXPENDITURES PUBLIC FINANCE PUBLIC POLICY RAPID ECONOMIC GROWTH RAPID GROWTH RATE OF INVESTMENT REAL GDP REAL GROWTH RATE REAL INTEREST REAL INTEREST RATE REGISTRATION FEES REPAYMENT RESTRICTED FOREIGN OWNERSHIP RESTRICTIONS ON ENTRY RETURN ROADS SKILLED WORKERS TARIFF REVENUE TARIFF REVENUES TAX TAX BASE TAX CHANGES TAX COLLECTION TAX COMPLIANCE TAX EVASION TAX POLICIES TAX POLICY TAX RATE TAX RATES TAX REFORM TAX REFORMS TAX REVENUE TAX STRUCTURE TAX STRUCTURES TAX SYSTEM TAXATION TELECOMMUNICATIONS TRADE BARRIERS TRADE LIBERALIZATION TRADE LIBERALIZATIONS TRADES TRADING TRANSACTION TRANSFER PAYMENTS TRANSFER TAXES TURNOVER TURNOVER TAXES UTILITIES UTILITY FUNCTION VOLATILITY WAGES Low tax revenue and slow economic growth are two central concerns in developing countries. However, policies that raise tax revenue also harm economic growth. With tax revenue coming mainly from large capital-intensive firms, and with a large informal sector, policies that aid large firms and policies that discourage entry of new firms both help increase tax revenue. Entrepreneurial activity as a result is discouraged, lowering growth. There is a basic tension in policy design between current tax revenue and economic growth. In fact, a loss in tax revenue can itself reduce growth, due to less spending on education and infrastructure. It can also undermine political support for the reforms from the poor and from government bureaucrats, both of whom are key beneficiaries of government expenditures. What policies encourage growth without undue loss of current expenditures? One is debt finance, but this creates the risk of a financial crisis if tax revenue rises too slowly to repay this debt. A second is user fees, but such fees still undermine political support from the poor. A third is partial reform, maintaining both higher taxes on and some protection for easily taxed firms, even while barriers to entry are eased. 2017-08-28T18:58:11Z 2017-08-28T18:58:11Z 2009 Working Paper http://documents.worldbank.org/curated/en/493491468151473073/Public-finance-and-economic-development-reflections-based-on-the-experience-in-China http://hdl.handle.net/10986/28023 English en_US Commission on Growth and Development Working Paper;No. 61 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research :: Working Paper Publications & Research East Asia and Pacific China |