Sunday, May 24, 2009

FT forum: Does aid work?

From the Financial Times:

“The notion that aid can alleviate systemic poverty, and has done so, is a myth. Millions in Africa are poorer today because of aid; misery and poverty have not ended but have increased.” Thus writes Dambisa Moyo, a brilliant former Goldman Sachs economist, of Zambian origin.

Thus notes the FT at the top of a discussion forum entitled "Is Aid Working?"

TJN thinks there can be a role for aid, but our mandate is focused towards tax, and we believe that to the extent that discussions about aid have displaced and obscured those on tax, this is harmful. The importance of tax is summed up in the words of Kenya's Revenue Commissioner in 2007: "Pay Your Taxes, and Set Your country Free." At the time of blogging, the FT's forum had attracted 24 comments. So far, no substantial comment on tax. Please join in and add yours.

(While you're at it, the FT arena has also been discussing tax, and notably the need to patch up ballooning deficits with higher taxes, here. Here is one part of their conclusion:

"Governments must choose taxes that spur economic efficiency, not expand those that are a drag on it. The former are easy to find, as the FT online debate on taxes showed with its suggestions of a carbon tax and (for the UK) a land value tax."

TJN supports both these taxes, though only (of course) as part of broad and comprehensive tax systems.


Blogger Physiocrat said...

Why do taxes need to be broad and comprehensive if a few good ones will do the job?

Every tax consumes valuable human resources in setting up, operating, compliance and avoidance. Less is best. The best brains in the country are wasting their energy in looking for ways round the tax system.

Taxes should focus on the use of resources and on "bads" - pollution, litter, consumption of harmful substances, etc. For example, instead of charging people to have their rubbish taken away, non-recyclable goods should carry a tax to pay for the cost of disposal.

4:23 am  

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