Should we engage in development cooperation with countries that have a notoriously low tax ratio?

Christian von Haldenwang and Philipp Krause

No 12/2009, Briefing Papers from German Institute of Development and Sustainability (IDOS)

Abstract: Some countries fail to ensure that their citizens and businesses make an appropriate contribution to the financing of public tasks. In such cases one can think of a number of reasons for reducing development cooperation or even stopping it altogether. But not all countries with a low tax ratio automatically fall into this category. Development policy should analyze countries carefully. It should not, however, shrink from linking resource allocation to the strengthening of tax systems if a partner country consistently fails to make efforts to increase its own revenues.

Date: 2009
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