Taxation in Latin America is largely viewed as a means of generating income to keep the government in business. In recent years, progress has been made towards increasing total revenue, but most countries in the region still lag well behind other countries with similar levels of development. More importantly, Latin American policymakers still largely ignore the potential of taxation to contribute to other important development goals. Yet dependence on consumption taxes such as the VAT and the regressive bent of the personal income tax structure have squandered the opportunity to attack the region's serious income inequality. In addition, the importance of efficiency in taxation has also been underestimated with a proliferation of inefficient ad hoc taxes such as those on bank transactions and exports. Governments have repeatedly missed the chance to influence consumption and production patterns by using taxes to effect relative price changes. More than Revenue aims to provide an up-to-date overview of the current state of taxation in the Latin America and Caribbean (LAC) region, its main reform needs, and possible reform strategies that take into account the likely economic, institutional, and political constraints on the reform process.

The "quality of life" concept of quality of life is a broad one. It incorporates basic needs but also extends beyond them to include capabilities, the "livability" of the environment, and life appreciation and happiness. Latin America's diversity in culture and levels of development provide a laboratory for studying how quality of life varies with a number of objective and subjective measures. These measures range from income levels to job insecurity and satisfaction, to schooling attainment and satisfaction, to measured and self-assessed health, among others.

"Paradox and Perception" greatly improves our understanding of the determinants of well-being in Latin America based on a broad "quality of life" concept that challenges some standard assumptions in economics, including those about the relationship between happiness and income.

The authors' analysis builds upon a number of new approaches in economics, particularly those related to the study of happiness and finds a number of paradoxes as the region's respondents evaluate their well-being. These include the paradox of unhappy growth at the macroeconomic level, happy peasants and frustrated achievers at the microlevel, and surprisingly high levels of satisfaction with public services among the region's poorest. They also have important substantive links with several of the region's realities, such as high levels of income inequality, volatile macroeconomic performance, and low expectations of public institutions and faith in the capacity of the state to deliver. Identifying these perceptions, paradoxes, and their causes will contribute to the crafting of better public policies, as well as to our understanding of why "populist" politics still pervade in much of the region.

This exciting new volume provides an up-to-date overview of the current state of taxation in the Latin America and Caribbean (LAC) region, its main reform needs, and possible reform strategies that take into account the likely economic, institutional, and political constraints on the reform process.

"Reaching the conclusion that the problems of underdevelopment are largely due to poorly functioning public institutions has become as popular as prescribing 'institution building' as a cure for poverty. Unfortunately, the popularity of these conclusions has tended to yield more banal observations than practical approaches; more empty speeches than clear ideas, denunciations rather than solutions. This book is a welcome departure from this trend. The State of State Reform is the most successful and rigorous effort to date to move the discussion on institution building from empty cliches to useful insights. Based on the Latin American experience, Eduardo Lora and his colleagues have combined a wealth of data on institutional reforms, rigorous analysis and well-informed common sense to offer a fascinating view of what it takes to make the State less of a problem and more of a solution. They show that buried under the constant avalanche of bad news coming from Latin America, progress has almost invisibly taken place. More importantly they also show that that the massive doses of technical prowess and political acumen required to improve the functioning of the public sector should no longer be considered a miracle but a realistic expectation. Reforming the State can be done; and this book shows how."
--Moises Naim, Editor-in-Chief, Foreign Policy Magazine
"This important book provides and illuminating and informative account of reforms that are changing the institutional landscape of the public sector of Latin America countries. The book provides a gold mine of information on many of these reforms. It ought to become requiredreading for both policy makers and serious scholars." --Vito Tanzi. Former Director, Fiscal Affairs Department, International Monetary Fund, Washington, D.C

"Reaching the conclusion that the problems of underdevelopment are largely due to poorly functioning public institutions has become as popular as prescribing 'institution building' as a cure for poverty. Unfortunately, the popularity of these conclusions has tended to yield more banal observations than practical approaches; more empty speeches than clear ideas, denunciations rather than solutions. This book is a welcome departure from this trend. The State of State Reform is the most successful and rigorous effort to date to move the discussion on institution building from empty cliches to useful insights. Based on the Latin American experience, Eduardo Lora and his colleagues have combined a wealth of data on institutional reforms, rigorous analysis and well-informed common sense to offer a fascinating view of what it takes to make the State less of a problem and more of a solution. They show that buried under the constant avalanche of bad news coming from Latin America, progress has almost invisibly taken place. More importantly they also show that that the massive doses of technical prowess and political acumen required to improve the functioning of the public sector should no longer be considered a miracle but a realistic expectation. Reforming the State can be done; and this book shows how."
--Moises Naim, Editor-in-Chief, Foreign Policy Magazine
"This important book provides and illuminating and informative account of reforms that are changing the institutional landscape of the public sector of Latin America countries. The book provides a gold mine of information on many of these reforms. It ought to become requiredreading for both policy makers and serious scholars." --Vito Tanzi. Former Director, Fiscal Affairs Department, International Monetary Fund, Washington, D.C

Geographic interpretations of development recently have become the subject of much renewed interest and debate within scholarly and public policy circles. Focusing on Latin America, this book examines how physical and human geography has influenced the region's potential for economic and social development.
The book assesses how geography affects differences in development between countries and more specifically between Latin America and other regions of the world. The effects of geography on regional development are examined through four channels: the productivity of land, health conditions, frequency and intensity of natural disasters, and access to markets. The book then explores how geography has influenced development within countries through case studies of Bolivia, Brazil, Colombia, Mexico, and Peru--countries significant for their geographical diversity as well as their wide socioeconomic disparities. These case studies illustrate numerous exceptions to international patterns and prove that while geography matters, it need not determine a country's destiny.
Using the knowledge gained from these two perspectives, the book concludes with recommendations for policies that can help countries overcome the limitations imposed by geography and thereby enhance their potential for economic and social development.

Traditionally, the concept of quality of life has been viewed through objective indicators of living conditions, basic needs, or capabilities. In "Beyond Facts, " the Inter-American Development Bank (IDB) looks at quality of life through a new lens, namely, the perceptions of millions of Latin Americans. Using an enhanced version of the recently created Gallup World Poll that incorporates Latin America specific questions, the IDB surveyed people from throughout the region and found that reality and perceptions of quality of life are often very different. Despite the rise of menial, low-paying employment, Latin Americans are largely satisfied with their jobs. Although greater income is associated with greater satisfaction, faster growth actually lessens satisfaction. These surprising findings have enormous significance for the political economy of the region and provide a wealth of information for policymakers and development practitioners to feast upon. "Beyond Facts" attempts to explain these apparent anomalies and consider their implications for both politics and policy.

This book looks at both the potential and limits of policies to promote entrepreneurship as an important vehicle for social mobility in Latin America and the Caribbean. Who are the region's entrepreneurs? They tend to be middle-aged males with secondary and, often, tertiary education who represent only a small segment of the economically active population in the six countries considered in this book. They come from families in which a parent is, or was, an entrepreneur. In fact, a parent's occupation is more important in the decision to become an entrepreneur than a parent's wealth, income or education. Middle class entrepreneurship tends to dominate the sample in part since this is the majority class in society. However, as a percentage of each social class, entrepreneurship tends to be higher in the upper class, followed by the middle and lower class. Entrepreneurs concentrate in micro enterprises with fewer than five employees. They enjoy greater social mobility than employees and the self-employed, but this mobility is not always in the upward direction. Entrepreneurs face multiple obstacles including stifling bureaucracy, burdensome tax procedures, and lack of financing, human capital, technological skills, and supportive networks. The support of family and friends and a modicum of social capital help cope with these obstacles to entrepreneurship.

A growing number of cities around the world have established systems for monitoring the quality of urban life. Many of those systems combine objective information with subjective opinions and cover a wide variety of topics. This book assesses a method that takes advantage of both types of information and offers criteria to identify and rank the issues of potential importance for urban dwellers. This method which combines the so-called 'hedonic price' and 'life satisfaction' approaches to value public goods was tested in pilot studies in six Latin American cities: Bogota, Buenos Aires, Lima, Medellin, Montevideo, and San Jose of Costa Rica. It provides valuable insights to address key questions such as, Which urban problems have the greatest impact on people s opinions of city management and the most widespread effects on their lives? Do gaps between perception and reality vary from one area of the city to another, especially between high- and low-income neighborhoods? Where can homebuilders most feasibly seek solutions to problems such as inadequate road infrastructure, a lack of recreational areas, or poor safety conditions? Which problems should government authorities address first, in light of their impact on the well-being of various groups of individuals and given private actors abilities to respond? Which homeowners benefit the most from public infrastructure or services? When can or should property taxes be used to finance the provision of certain services or the solution of certain problems? 'The Quality of Life in Latin American Cities: Markets and Perception' proposes a monitoring system that is easy to operate and that entails reasonable costs but also has a solid conceptual basis. Long the ideal of many scholars and practitioners, such a system may soon become a reality and have the potential to make a significant contribution to the decision-making processes in any city concerned with the well-being of its residents."