The research design is feasible and impressing. My questions regard the argument behind the model. First, the progressivity of taxation can be influenced considerably by the extractive capacity of the state and the organization power of social groups. You seem to notice the importance of state capacities when talking about which level of government has been focused in Argentina and Brazil. I would go as far as including variables measuring state capacity and mobilization of advantaging social groups such as workers in formal sector and business into the regression to control for the potential effect of the power configuration between the state and society on taxation. The other question, closely related with the first one, is that state capacity might be endogenous to taxation. I actually have not thought through how to conciliate the trade-off between the potential omitted variable (state capacity) and the endogeneity after including the variable (state capacity). Instrument variables might be of help?
I really liked the idea and think that it's a very interesting argument and valid contribution to the field. I had a couple of questions. Within the framework of how democracies and authoritarian regimes handle progressive taxation, I was wondering how voter’s turnout applies in the case of democracies. The assumption that in unequal democracies, the median voter will be of a lower class only holds if the lower classes vote, which is not necessarily true in all cases. In places were voting is compulsory (e.g. Brazil), one could then argue that the median voter would request progressive taxation. However, if voting is not compulsory and the lower classes don’t vote, you wouldn’t observe that behavior (or would you?) Additionally, I was wondering how international capital markets and IMF/WB play a role specifically in Latin America with regards to taxation. The demand for healthier fiscal balances and adjustments from the international arena has had an impact on Latin American democracies, particularly those more globally active.
The research design is feasible and impressing. My questions regard the argument behind the model. First, the progressivity of taxation can be influenced considerably by the extractive capacity of the state and the organization power of social groups. You seem to notice the importance of state capacities when talking about which level of government has been focused in Argentina and Brazil. I would go as far as including variables measuring state capacity and mobilization of advantaging social groups such as workers in formal sector and business into the regression to control for the potential effect of the power configuration between the state and society on taxation. The other question, closely related with the first one, is that state capacity might be endogenous to taxation. I actually have not thought through how to conciliate the trade-off between the potential omitted variable (state capacity) and the endogeneity after including the variable (state capacity). Instrument variables might be of help?
ReplyDeleteI really liked the idea and think that it's a very interesting argument and valid contribution to the field. I had a couple of questions.
ReplyDeleteWithin the framework of how democracies and authoritarian regimes handle progressive taxation, I was wondering how voter’s turnout applies in the case of democracies. The assumption that in unequal democracies, the median voter will be of a lower class only holds if the lower classes vote, which is not necessarily true in all cases. In places were voting is compulsory (e.g. Brazil), one could then argue that the median voter would request progressive taxation. However, if voting is not compulsory and the lower classes don’t vote, you wouldn’t observe that behavior (or would you?)
Additionally, I was wondering how international capital markets and IMF/WB play a role specifically in Latin America with regards to taxation. The demand for healthier fiscal balances and adjustments from the international arena has had an impact on Latin American democracies, particularly those more globally active.