Taxing for Development: Contested Ideas, the State and Commodity Taxes

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The PDF year is intended to maximise the impact of my core PhD research exploring how ideas of tax impact upon tax collection, fiscal policy and ultimately development trajectories. I explored how historically contentious export taxes on agricultural producers in rural areas were temporarily legitimised by the national crisis following the Argentine debt default in 2001. In doing so, I explored social aspects of tax collection and also emergency governance and taxation in times of crisis. However, I argued that the taxes then became politicised when the crisis abated but the taxes remained. Now augmented welfare spending and wealth redistribution that the taxes were driving became associated with a contested vision of state and not one of crisis recovery. One of my central arguments was that ideas of tax became enmeshed with opposing ideas of what role the state should play in socio-economic life. It was not sufficient to say that that weak institutions or interests that were impinged were responsible for a major tax revolt and political change in Argentina. Rather, it was opposing ideas of tax that mattered. The broader argument was that a failure to build social consensus around tax can create barriers to tax collection and redistribution.To provide this analysis, I applied a theoretical framework drawing from Historical Sociology and Political Economy to better understand how tax is legitimated for developmental purposes. In the PhD I made three principal conclusions. First, tax is contentious and subsequent twentieth century Argentine governments had bypassed asking difficult tax questions by instead choosing debt-led development strategies. In doing so, no social consensus around export taxes was ever built. Second, the emergency situation in 2001/02 bestowed temporary legitimacy as export taxes were presented as emergency taxes but they were only legitimate for crisis response; when taxes were perceived to be funding an interventionalist state model, the tax was rejected. Third, I argued that the debate transcended one solely about tax, but tax became the fault line around which other factors coalesced. The government became embroiled in a wider political debate but one that the taxes could not be separated from because ideas of these taxes were inextricably linked with the type of state the president was building. Teasing out the implications of this research, I propose in the PDF year to expand the understudied concept of tax ideas and situate the research in a wider geographical context. First, I will build a new conceptual framework by engaging with the emerging sub-field of' New Fiscal Sociology' and empirically apply this framework to the wider challenges of tax collection in developing countries in Latin America and sub-Saharan Africa. Both regions face shared fiscal challenges: colonial legacies, export-led development, weak institutions, fragmented tax systems and in some cases political instability. However, I will argue why opposing ideas of tax, and debates of 'state versus market' should not be discounted from tax policy discussions. I will also incorporate questions of federal taxation and redistribution, which is an area not explicitly explored in the PhD but one which warrants further exploration as it is an area that can create a barrier to tax collection. The PDF programme of work will build on my PhD research to make a number of contributions to tax policy debates. It offers a nuanced analysis of the importance of building social consensus around tax design and lays bare how contentious tax can be if consensus is not reached. It offers a critical and contemporary evaluation of the challenges of legitimising tax reforms in developing countries. Finally, it offers qualitative insights into how strengthening the effectiveness of tax systems in developing countries should not only focus on bridging interests and strengthening institutions but on navigating opposing ideas.