Publication (PDF format) - Institut économique de Montréal

Table of ContentsEXECUTIVE SUMMARY ......................................................................................................................... 5CHAPTER 1 – IFD AND IFD TAXES1.1 What is IFD? ..................................................................................................................................... 71.2 IFD Taxes ........................................................................................................................................... 9CHAPTER 2 – ARE IFD TAXES EFFICIENT? A STANDARD PUBLIC FINANCE APPROACH2.1 Market Failure and Specific Criteria for “Good” Taxes ....................................................................... 152.2 Efficiency ........................................................................................................................................ 172.3 Administrative Costs ........................................................................................................................ 232.4 Flexibility ......................................................................................................................................... 242.5 Political Responsibility and Accountability: Transparency ................................................................... 242.6 Fairness and Tax Incidence ............................................................................................................... 252.7 Serious Questions about IFD Taxes ................................................................................................... 26CHAPTER 3 – ARE IFD TAXES EFFICIENT? A PUBLIC CHOICE APPROACH3.1 Tax Exploitation ............................................................................................................................... 273.2 Rent-Seeking ................................................................................................................................... 283.3 Hidden and Inefficient Taxes: Transparency Again ............................................................................. 31CHAPTER 4 – DOES DEVELOPMENT AID ACTUALLY PROMOTE DEVELOPMENT?4.1 Development Aid and Development Resources: The Fungibility of Money .......................................... 334.2 Evidence on the Impact of Development Aid .................................................................................... 344.3 Institutions and Economic Freedom .................................................................................................. 36CONCLUSION ...................................................................................................................................... 41BIBLIOGRAPHY .................................................................................................................................... 42Chart 1: Revenues from the Tax on Airline Tickets in France (Millions of Euros) .......................................... 10Chart 2: Important IFD Mechanisms and Agencies, Implemented or Proposed as of 2010 ......................... 11Chart 3: Potential of Current and Proposed IFD Taxes Compared to Official DevelopmentAssistance (Billions of US$ per Year) ........................................................................................................ 12Chart 4: Qualitative Evaluation of Current or Proposed IFD Taxes Using StandardCriteria for Good Taxes ............................................................................................................................ 17Chart 5: Econometric Estimates of the Elasticity of Demand for Passenger Air Transport ............................ 19Chart 6: Estimated Elasticities of Trading Volume with Respect to Transaction Costs .................................. 21Chart 7: GAVI’s Remuneration Costs and Average Remuneration in Full-Time Equivalent .......................... 30Chart 8: Development Aid and Economic Growth in Africa ....................................................................... 35Chart 9: Correlation Between Economic Growth (Combined with Good Domestic Policies)and Development Aid, 1970-1997 ........................................................................................................... 36Chart 10: Economic Freedom and GDP per Capita, 2010 ......................................................................... 37Chart 11: Correlation Between Economic Freedom and GDP per Capita, 2010 ......................................... 38Chart 12: Economic Freedom and Economic Growth, 1990 to 2010 ......................................................... 39