Taxation, fiscal space and resource mobilization

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Responding to the social protection needs of the population requires a sufficient level of resources. Most of these resources have to be raised at the national level, ensuring sustainability, equity and solidarity in financing, and good governance. National tax systems are one important source of financing, particularly with regard to a sufficiently broad and progressive revenue base, taking into account different types of taxes. Other possible options to expand fiscal space for social protection include the reprioritization of public expenditure, earmarking revenues from natural resources, as well as international cooperation and support in the case of countries with insufficient economic and fiscal capacities.

While different strategies can be sought to raise the necessary resources for social protection, such as the re-prioritization expenditures, increases in the tax base, improvements in the collection of revenues etc., the creation of the necessary fiscal space in the government budget to finance  social protection benefits ultimately depends on the political will do commit the necessary resources. For tax-financed provisions, the tax base has to be sufficiently progressive; otherwise the objectives of the social protection system are undermined by the tax burden placed on the poor and vulnerable population groups. Similarly, contributory schemes need to take the contributory capacity of persons covered into account. The financial sustainability of the social protection system also greatly depends on the government’s ability to enforce existing tax and contribution obligations. Financial sustainability also requires that provisions are made for the system to be able to respond to shocks or crises.

Photo credit: “Bamboo” by Phil Dokas (CCBY 2.0 via Flickr).

 

Legal Instruments

Social Protection Floors Recommendation, 2012 (No. 202)

Recommendation No. 202 is the first international instrument to offer guidance to countries to close social security gaps and progressively achieve universal protection through the establishment and maintenance of comprehensive social security systems. To this aim, the Recommendation calls for (1) the implementation, as a priority, of social protection floors (SPF) as a fundamental element […]

Resources

IMF Monitor

The website makes the first comprehensive and transparent database of IMF-mandated policy reforms  freely available to interested researchers and civil society organizations. The database systematizes the 58,406 conditions applicable to IMF programmes over the 1980-2014 period. The data was extracted from countries’ loan agreements with the IMF. This resource enables nuanced explanations of the economic, social […]

From Expansion to Austerity: challenges and risks of the radical fiscal policy turn in Brazil (One-Pager 360)

Brazil, in the period after the great financial crisis of 2007–2008, presents a compelling case study of the interactions between fiscal policy and business cycles. The country is noteworthy not only for being one of the very few that dealt relatively well with the most acute stage of the crisis, maintaining its dynamism throughout most […]

Brazilian Fiscal Policy in Perspective: from expansion to austerity

This paper analyses the changes in orientation and composition of Brazilian fiscal policy, focusing on three recent periods and seeking to explore their relationship with economic performance. The first period (2005–2010) was characterised by fiscal expansion, with public investment and redistributive transfers as its main drivers. Economic performance was extraordinary. During the second period of […]

Playing with Fire: deepened financial integration and changing vulnerabilities of the Global South

From the early 1990s many emerging and developing economies (EDEs) liberalized their capital accounts, allowing greater freedom for international lenders and investors to enter their markets, as well as for their residents to operate in international financial markets. Despite recurrent crises, liberalization has accelerated in the new millennium. Global financial integration of EDEs has been […]

The Political Economy of Tax Reforms and the Implications for Social Development in Nicaragua

This paper examines the mobilization of domestic resources for social development in Nicaragua, analysing the fiscal system, its main tool. The main argument of the paper is that many tax reforms that have taken place in Nicaragua since the 1970s have been motivated mainly by the objective to increase revenue collection. However, through all the […]

A Political Economy Analysis of Domestic Resource Mobilization in Uganda

This synthesis paper brings together the research findings from four papers prepared by the Uganda team as a part of the UNRISD Politics of Domestic Resource Mobilization for Social Development project, which addresses three broad themes: bargaining and contestation, key relations, and institution building with regard to mobilizing resources for social development. In the paper […]

Reformas Estatales, Fortalecimiento Institucional y Políticas de Movilización de Recursos en Nicaragua: El Caso del Sector de la Salud

En el presente estudio sobre la movilización de recursos domésticos para el desarrollo social se analiza el sector de la salud en Nicaragua desde 1972 hasta 2015. Se examinan las variaciones en las políticas que afectan el sector salud y su financiamiento, el papel de las instituciones, la fuerza de las ideas nacionales e internacionales, […]

Fiscal Space for Social Protection and the SDGs: Options to Expand Social Investments in 187 Countries (ESS Working Paper No. 48)

It is often argued that social protection is not affordable or that government expenditure cuts are inevitable during adjustment periods. But there are alternatives, even in the poorest countries. This working paper offers eight options that should be explored to expand fiscal space and generate resources to achieve the Sustainable Development Goals (SDGs), realize human […]

Política Fiscal para la Igualdad y los Derechos: Mapeo de debates, iniciativas y actores de la Región Andina

La política fiscal tiene un rol central en la superación de las desigualdades socio-económicas y el cumplimiento de los derechos humanos. Su potencial rol redistributivo convierte a esta política en una herramienta única para lograr un modelo de desarrollo que tenga como ejes centrales la igualdad, los derechos humanos y la sostenibilidad medioambiental. Bajo esta […]

Financing Development for Children in Africa: The state of budget transparency and accountability in the continent

This report builds on the findings of the Open Budget Survey 2015, by taking a closer look at the 31 African countries included in the survey. It seeks to promote transparency and accountability in the use of government budgets in Africa. The rationale for this report is twofold. First, Africa is witnessing a historic demographic […]