Christian Daude, Hamlet Gutierrez and Angel Melguizo
Tax incentives can be a useful tool to stimulate investment in developing countries. However, interest groups often are able to exert considerable influence in its management, if…
Abstract
Purpose
Tax incentives can be a useful tool to stimulate investment in developing countries. However, interest groups often are able to exert considerable influence in its management, if not its design. The purpose of this paper is to use a power-based approach to the political economy of tax reform to analyse the case of tax incentives for investment in the Dominican Republic. Based on original interviews and a detailed analysis of regulations, the authors study how interest groups work within the institutional framework to seek outcomes that best fit their objectives. However, when unsuccessful, they become powerful advocates of change. These power dynamics have important implications for the design and management of tax incentives in the Dominican Republic and in other developing economies.
Design/methodology/approach
Case study based on informed interviews with policy makers, lobbyists and researchers combined with statistical and administrative information to test the main hypotheses.
Findings
While the role of influence groups in creating tax schemes has been widely studied, the authors show that these groups can also have an important role in the administration of the regime and making it more or less open to modifications. The paper shows that the capture of investment incentives has rendered the tax system rigid and unstable in the Dominican Republic, subjecting the public interest hostage to the gain of few.
Research limitations/implications
Therefore, there is a need to review and reform tax policy, not just from a technical viewpoint, but more importantly altering the political arrangements. More transparency in assessing the impact of these schemes, disclosing information of who has access to tax exemptions and budgeting the tax expenditures can also be tools to increase public control over these instruments. Also, making it more difficult to grant tax incentives, for example by asking for an ex-ante justification and quantification of the externalities supposedly being created would reduce the abuse by power groups of these instruments. Without more balanced and independent leadership, it would be extremely difficult to advance in these fields.
Originality/value
The literature on the political economy of tax incentives normally focuses on how key actors work around the institutional framework to solve conflict of interests. This paper addresses a complementary – and in the viewpoint equally relevant – aspect of the political economy of tax incentives: once enacted, vested interests have a particular motivation to keep the incentives in place, and therefore the authors should understand how key actors work from within the institutional framework to seek the outcomes that better suit their interests. The analysis focuses on Dominican Republic, based on official data and additional in-depth interviews with policy makers, entrepreneurs and consultants that assist firms with tax and regulation issues.
Details
Keywords
Luis Carranza, Christian Daude and Angel Melguizo
This paper aims to understand the relationship in developing countries between fiscal consolidation and public investment – a flexible part of the budget that is easier to cut…
Abstract
Purpose
This paper aims to understand the relationship in developing countries between fiscal consolidation and public investment – a flexible part of the budget that is easier to cut during consolidation effort, but with potentially negative growth effects. Analyzing in detail the case of Peru, the paper explores alternative fiscal rules and frameworks that might help create fiscal space for infrastructure investment.
Design/methodology/approach
The paper analyses trends in public and total infrastructure investment in six large Latin American economies, in the light of fiscal developments since the early 1980s. In particular, the paper explores the association between fiscal consolidations (improvements in the structural fiscal balance) and public infrastructure investment rates. In the second part, the paper analyzes recent changes in the fiscal framework of Peru and shows how they were conductive in creating additional fiscal space.
Findings
The authors argue that post-crisis fiscal frameworks, notably fiscal rules that are increasingly popular in the region, should not only consolidate the recent progress towards debt sustainability, but also create the fiscal space to close these infrastructure gaps. These points are illustrated in a detailed account of recent developments in the fiscal framework and public investment in the Peruvian case.
Originality/value
The paper contributes new evidence to the literature on fiscal consolidation and the composition of government expenditures. While the literature based on evidence from the 1990s has argued that fiscal consolidation plans in Latin America have almost always led to a significant reduction in public infrastructure investment, the paper finds less clear cut evidence when extending the analysis backwards (1980s) and forwards (2000s). The example of the case of Peru is used to explore fiscal institutions and rules that might be useful for other developing countries that face important infrastructure gaps.
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Claudia Benavides-Salazar, Cristina Iturrioz-Landart, Cristina Aragón-Amonarriz and Asunción Ibañez-Romero
This paper aims to investigate how entrepreneurial families (EFs) influence the development of entrepreneurial ecosystems (EEs) by using the family social capital (FSC) approach.
Abstract
Purpose
This paper aims to investigate how entrepreneurial families (EFs) influence the development of entrepreneurial ecosystems (EEs) by using the family social capital (FSC) approach.
Design/methodology/approach
For this paper, the authors analyzed the Manizales EE as a case study. The authors used a variety of data collection procedures, including in-depth interviews with 26 entrepreneurs and mentors.
Findings
The authors established how EFs affect EE development, identifying how the FSC bridging mechanisms impact the EE’s social and cultural attributes, boosting entrepreneurial dynamics.
Originality/value
The results indicated the relevance of EFs’ embeddedness and the degree of the FSC institutionalization in promoting of entrepreneurship within the EEs.
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David Díaz Jiménez, José Luis López Ruiz, Jesús González Lama and Ángeles Verdejo Espinosa
The main objective of the study is to address the lack of sustainability assessments of smart connected health systems in the academic literature by presenting an assessment model…
Abstract
Purpose
The main objective of the study is to address the lack of sustainability assessments of smart connected health systems in the academic literature by presenting an assessment model to determine the alignment of these systems with the 17 Sustainable Development Goals (SDGs) proposed in the 2030 Agenda.
Design/methodology/approach
An evaluation model based on decision analysis is proposed that includes three phases: alignment framework, information gathering and assessment. This model measures the alignment of the connected health system with each of the 17 SDGs, identifying the goals and criteria associated with each SDG that the system achieves to satisfy.
Findings
The analysis reveals that the system has achieved more than 24% of the targets among the 17 SDGs. In addition, it identifies four sustainability challenges that the system potentially addresses in relation to the SDGs, providing valuable guidance for researchers and practitioners interested in sustainable health technology development.
Practical implications
The study's results have significant implications for policymakers and stakeholders in the health and technology sectors.
Originality/value
The originality of this study lies in its comprehensive approach to assessing the sustainability of connected health systems in the context of the SDGs, filling an important gap in the existing literature.