The COVID-19 pandemic has pushed 120 million people across the globe into extreme poverty, and the limited data available thus far suggests that the wealth of extremely rich individuals has risen at the same time. In this blog post, we provide new evidence that in addition to its human cost, terrorism can have important consequences for public budgets. Most of the costs of terrorism—like loss of life and political upheaval—are well-known, but the macroeconomic and fiscal impacts are less well understood.
CGD Policy Blogs
The COVID-19 pandemic has left a large dent in the government budgets of low-income countries (LIDCs). During 2020, they had no choice but to increase public spending to fight the pandemic at a time when shrinking economic activity depressed their revenues. In this blog post, we argue that while these efforts to expand the flow of concessional resources to LIDCs are laudable, they are unlikely to be sufficient and, going forward, some form of debt relief will be necessary to secure fiscal sustainability down the road for these countries.
US President Biden has proposed an ambitious plan to reduce US emissions to 50 percent of their 2005 levels by the year 2030. Biden’s plan is targeted only at US emissions, but climate change is a global problem. What would happen to global emissions of CO2 if every country in the world took a similar step? In this blog post we assess the impact of such a plan.
While a drastic reduction in carbon emissions is necessary to contain climate change, countries still have not reached a consensus on a fair division of responsibilities in reducing them. While advanced economies were the biggest emitters in the past, emerging economies, such as China and India, account for an increasing share of new emissions. From the standpoint of fiscal policy, these carbon emissions, which adversely affect the world’s well-being, are a negative externality. At present, countries do not bear the full cost of these externalities. The cumulative sum of these liabilities can be viewed as a “climate debt” a country owes to the global community.
The COVID-19 pandemic has cost lives and disrupted economic activity worldwide. It has impacted government budgets globally by reducing tax receipts and increasing spending on programs to save lives and transfer income to those adversely affected by the pandemic.
In a paper and blog we delve into political considerations that influence the implementation of tax reforms in 45 emerging market and low-income economies.
The Addis Ababa Agenda for financing development pays special attention to domestic revenue mobilization to help finance the Sustainable Development Goals (SDGs) in developing countries. In the case of sub-Saharan African countries, much of the discussion has centered on improving their overall revenue performance, and while they have, there is still a long way to go.
The level and composition of taxes and expenditures vary considerably across low-income countries, which means their effects on countries’ growth, economic stability, redistribution, and welfare also differ.
Many developing countries are pursuing domestic revenue mobilization (DRM) initiatives, which is critical for them to finance the spending necessary to enable sustainable development. The need for DRM has now taken on greater urgency given the fiscal implications of the COVID-19 crisis.
In this blog post, we argue that the COVID-19 crisis has made it imperative for developing countries to begin reforming their tax systems to generate more resources domestically—reforms which they have postponed until now because of vested interests. Reforming tax expenditures would not only generate additional revenues, but it would also improve taxpayer perception of the fairness of the tax system and enhance budget transparency.