Discussion Paper

Revenue structures and the question of who pays taxes: understanding the conditions under which elites pay taxes in developing countries

von Schiller, Armin
Discussion Paper (17/2012)

Bonn: German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE)

ISBN: 978-3-88985-622-7
Price: 6 €

Revenue structures vary strongly among developing countries. Most approaches to tax performance fail to give insights into this puzzle. I argue that much of the answer lies in the political dimension and highlight the willingness of elites to pay taxes as the most crucial factor. In contrast to common arguments stressing the relevance of external pressure in explaining tax contributions of elites, I examine how characteristics of the interaction among elites themselves are relevant aspects to take into account. The analysis has strong policy implications. In supporting the emergence of higher performing and fairer tax systems a strategy based on partly aligning with elites' interest and identifying positive drivers of taxation seems more efficient and promising for development cooperation than wagering on strengthening external pressure on powerful social groups. However, the preconditions for the success of these strategies as well as their potential effect on other development goals and future development paths of partner countries call for a cautious trade-off analysis.

Further experts

Baumann, Max-Otto

Political Science 

Breuer, Anita

Political Scientist 

Dick, Eva

Sociologist and Spatial Planner 

Fasold, Maximilian

Political Economy 

Haldenwang, Christian von

Political Science 

Houdret, Annabelle

Political Scientist 

Leininger, Julia

Political Scientist 

Mchowa, Chifundo

Development Economics 

Morare, Ditebogo Modiegi

Political Science 

Nowack, Daniel

Political Science 

Roll, Michael

Sociology 

Walle, Yabibal

Development Economics 

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