Transition, Taxation and the State docx

[...]... rather than to the classical socialist system where money was passive and plans were expressed in terms of physical quantities and output targets 14 Transition, Taxation and the State enterprises Despite these incidences, for countries like Poland and Hungary, the ‘helping hand’ has been replaced by Adam Smith’s ‘invisible hand’.5 For Russia and other FSU states, neither the helping-hand model nor the. .. problems Transition, Taxation and the State outlines the tax collection and discipline problems (particularly in the context of the soft budget constraint and the state- enterprise relationship legacy of the socialist era) that the postsocialist state in transition countries experienced in the first decade of transition As for the state (or the ‘tax state to use Joseph Schumpeter’s expression) and tax revenue... approach, although there is recognition for the need to reduce the role of the state, the emphasis is on a reconstituted state and improving state capacity (so as to, among other things, enhance the market environment) as opposed to a weakened state It also stresses the path dependency of system development and is mindful of the historical continuity and the communist legacy unlike the ahistorical, tabula... workers, and maintaining law and order’ (Brown 1999); ‘ a failure of the central state (Gustafson 1999) and ‘ the on-going meltdown of the state (Nagy 2000) 18 Transition, Taxation and the State it should be doing, whether that is enforcing the rule of law, building an effective public administration, ensuring property rights and contract enforcement, providing essential public services, legitimising the. .. attention away from some of the more important aspects of economic transition One such feature of transition is the SBC 4 Transition, Taxation and the State 1.2 Definition and Interpretation of the SBC The incentive problem inherited from the socialist system known as the SBC takes its name from the budget constraint faced by households in standard microeconomic theory The budget constraint was first... addresses the issue of state governance with respect to taxation and, in particular, the problems of tax discipline and collection The motivation for focusing on taxation and tax collection stems from observing the general decline in tax revenues witnessed by the majority of ex-socialist countries since the start of transition with a view to providing, from the perspective of the tax collector (i.e the state) ... by the International Monetary Fund (IMF) in the 1970s to study international 10 Transition, Taxation and the State differences in tax ratios among developing countries, and extend it to the TEs using data for the 1990s The results indicate that many Commonwealth of Independent States (CIS) transition countries resemble more closely the low- and middle-income countries of Asia and Latin America than their... evasion and a primitive tax culture) as explanations for the fall in tax revenues In contrast, this book examines the problem of revenue erosion from the position of the tax collector, that is, the state, and, in particular, the weakness of the state as creditor, i.e its (in)ability or (un)willingness to collect taxes An appropriate theoretical framework for analysing the role of the state as creditor and. .. paradoxes This is the other side of the story, a side that is often neglected and seldom recognised Leaving this aside, the rest of this chapter explores the relationship between the ‘tax-collecting state and the ‘tax-paying enterprises’ in a particular transition economy, namely Russia (in the first decade of transition) In effect, it is Tax, Transition and the State: The Case of Russia 17 the story of... approach (Clague and Rausser 1992; Roland 2000; Bönker et al 2002) Although an outline of the two major paradigms of transition is useful in the context of this book, many observers feel that the debate between the two approaches and, in particular, the controversy between ‘shock therapy’ and gradualism and the tendency to label countries as either one or the other, has not been very helpful and has unintentionally . in the context of the fluid state- enterprise relationship that is common in the transition from plan to market, the capacity of Transition, Taxation and the State 2 the reconstituted state and. Transition, Taxation and the State outlines the tax collection and discipline problems (particularly in the context of the soft budget constraint and the state- enterprise relationship legacy of the. economy, the transformation of a socialist state to a capitalist state, the nexus between government and business, and the persistence of the soft budget constraint. Much of the literature on the