Latin Fiscal and Social Cohesion (Haldenwang)

Christian von Haldenwang discusses in this paper two interrelated arguments about taxation, social cohesion and fiscal decentralization in Latin America. First, taxes are a key element of social cohesion – not only because they provide the means for social policies and public goods provision, but also because the tax regime has important repercussions on growth and competitiveness. Second, it can be assumed that citizens will be more willing to acknowledge the necessity and “rightfulness” of taxation if there is a close relationship between taxes and the provision of public goods and services. The Discussion Paper was published by Deutches Institut, Bonn, 1/2008.