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Working Paper

The Journal of Development Studies Vol 52

The Political Economy of Domestic Tax Reform in Bangladesh: Political Settlements, Informal Institutions and the Negotiation of Reform

Published on 12 May 2016

This paper explains the persistence of a tax system characterised by low revenue collection and extensive informality in Bangladesh. It combines analysis of long-term formal and informal institutions and of micro-level incentives shaping negotiation of short-term reform.

The system is unusually informal, discretionary, and corrupt, but remains resistant to change because it delivers low and predictable tax rates to business, extensive opportunities for corruption to the tax administration, and an important vehicle for fundraising by political leaders and rent distribution to their elite supporters. We then explore the dynamics of micro-level reform and external pressure within the constraints of this overarching political bargain.

Authors

Image of Wilson Prichard

Wilson Prichard

IDS Research Fellow and ICTD Chief Executive Officer

Publication details

authors
Hassan, M. and Pritchard, W.
journal
Journal of Development Studies, volume 52, issue 12
doi
https://doi.org/10.1080/00220388.2016.1153072
language
English

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About this publication

Region
Bangladesh

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