Tax policy and planning in developing countries

de A. Bagchi, N. H. Stern

In the fifties and sixties many developing countries, in an anxiety to accelerate growth, adopted a strategy of development relying heavily on investment planning, with a lead role for the public sector. The reasons seemed obvious and persuasive then for countries sorely lacking in basic infrastructure. As the decade of the eighties drew to a close it was evident that planning, as it had been practised by many countries in the past, was no longer viable. While socialist economies sought ways of loosening the grip of the state over economic activities, countries with mixed economies had to contend with chronic imbalances in the government budget, inflation, and severe balance of payments problems. Against this backdrop of crisis in the public finances of developing countries, this work, based upon the deliberations of the International Seminar on Public Finance and the Planning Process, Delhi 1990, in which a galaxy of distinguished development economists from all over the world participated, takes stock of the experience of countries practising planning in some form so that policies for the future can be developments from the point of view of theory, and to examine how far theory can provide insights into corrective development strategies.