Monthly Archives: January 2013

Service Sector Reform and Manufacturing Productivity: Evidence from Indonesia

WorldBank_logoFor the past six months, I have been working with the World Bank in both Indonesia and in the US. In particular, I have been looking at the impact of changes to service sector FDI policies on productivity in downstream manufacturing sectors. Today, the fruits of these labours were published as a World Bank Policy Research Working Paper, co-authored with two of my colleagues from the Jakarta office. Continue reading

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ESRI: By Any Measure, Ireland is Still a Low Tax Nation

Alongside its latest Quarterly Economic Commentary, the ESRI today published its usual series of interesting research notes on the Irish economy.

In light of Ireland’s ongoing fiscal consolidation efforts, and the accompanying public debate, two of the notes are of particular interest (even if one could draw opposite conclusions from them):

1) Tax and Taxable Capacity: Ireland in Comparative Perspective, by Tim Callan and Michael Savage.

2) The Macro-Economic Effects of Raising Revenue through Different Taxes, by  John Fitzgerald, Thomas Conefrey, Lara Malaguzzi Valeri and Richard Tol.

Callan and Savage take a look at the OECD’s 2011 Revenue Statistics to compare where Ireland stands in terms of taxation as a share of national income compared to our EU-15 neighbours.  Continue reading

Côte d’Ivoire: An Elephant at the Crossroads

cote_d_Ivoire_flagIn 2013, Côte d’Ivoire will be aiming to go one better than in 2012 across two fronts. The national football team will try to improve on last year’s runners-up spot in the African Cup of Nations, while the Ivorian authorities are targeting an increase in real GDP growth from 8.6% to 9%.

Having contracted by -4.7%  in 2011 on foot of the post-electoral political crisis that saw 3,000 people killed, real GDP rebounded strongly in 2012. Whether this represents a one-time recovery of lost ground or is indicative of higher trend growth remains to be seen. The Ivoirian authorities are aiming for double-digit growth rates from 2014 in a bid to position the country as an emerging market by 2020. Although slightly less bullish, the IMF expects a still impressive average growth rate of 7.5%  over the 2013-2015 period. Continue reading

The Psychology of Taxation

“Death, taxes and childbirth! There’s never a convenient time for them.” – Margaret Mitchell, Gone with the Wind, 1936

It is hardly controversial to suggest that rational people prefer to pay less tax rather than more, assuming all else is equal. If one follows the public debate in Ireland, however, it soon becomes clear that rationality is not universal on fiscal matters.

As the government struggles to bring the budget deficit under control, and as we are in a phase of increasing rather than stable or falling taxes, this is all the more pertinent. What is at issue, from the government’s perspective, is how to distribute and minimize citizens’ inevitable displeasure at rising taxes.

All taxes are not created equal, it would appear. What you pay tax on, and how you pay it, seems to matter a great deal,  perhaps even more so than the extent to which taxes hit our pockets. Continue reading

Ireland’s Top 1%

Nobel Laureate Joseph Stiglitz can stake some claim to being the intellectual father of the ‘Occupy’ movement with his May 2011 Vanity Fair article ‘Of the 1%, by the 1%, for the 1%‘. He followed up with a book in 2012, ‘The Price of Inequality‘. This, in turn, builds on inter alia the 2003 and 2004 scholarly works of Thomas Piketty and Emanuel Saez on income inequality in the US since 1913.

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Piketty, Saez and others – including Ireland’s Brian Nolan – have since worked to bring together data on top income shares for some two dozen countries and counting in a consolidated database (complete with helpful interactive graphics).

Continue reading

Top Posts of 2012

This blog is a year old this week.

In 2012, the three most popular posts (in terms of hits) were:

1) Financial Repression Update

2) The Boom Bust Life Cycle of Ireland’s Balance of Payments and Net Foreign Assets

3) Mexico: A Political Risk Assessment