Edited by Yariv Brauner and Miranda Stewart
Chapter 8: The globalization of tax expenditure reporting: transplanting transparency in India and the Global South
This chapter traces the rise of tax expenditure reporting in countries of the Global South, with a particular focus on India. It investigates why and how policy-makers in some low and middle income countries are now moving to adopt a budgeting practice that originated in wealthy Western nations in the 1970s. I discuss the potential advantages of this trend, but also argue that there is a need for its champions to face up to some challenges and potential disadvantages of transplanting this form of fiscal transparency into different national contexts. These include methodological and political challenges that are well known to Western observers but are seldom fully acknowledged in the literature advocating adoption of tax expenditure reporting by developing countries. In addition, the chapter questions whether generic prescriptions are sufficiently attuned to local political, economic and institutional circumstances that may diminish the value of OECD-style tax expenditure reporting to receiving countries. Section II briefly reviews the history of tax expenditure analysis since the late 1960s and then charts the more recent campaign to encourage its implementation by developing countries. The analysis shows that inter- national organizations, Western commentators and domestic tax policy experts have all contributed to this campaign. Advocates have tended to rely on two main types of rationale. The first is technocratic, stressing the value of tax expenditure reporting to government policy-makers seeking to craft a more efficient, equitable and administratively simple tax system which raises maximum revenues to finance state priorities.
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