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Increasing the Role of Environmental Taxes and Charges as a Policy Instrument in Developing Countries

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  • Juergen G. Backhaus

Abstract

. The judicious use of natural resources is a crucial prerequisite for sustainable growth not just in developed countries but even more so in the third world. More generally, natural resource use is determined to a substantial degree by the tax structure governing a country's economic activity. When a tax constitution can be designed that stimulates the judicious use of natural resources, an important step toward achieving sustainable growth has been made. Designing such a constitution is not a simple task, however. For third‐world countries, the task is further complicated by at least three factors. First, the tax system has to be exceedingly simple, since both number and quality of tax instruments available to third‐world governments tend to be limited. Second, the legal system tends to mirror the state of economic development. This limits not only the tax structure an economy can bear; it also limits a government's ability to regulate natural resource use by legal means. Third, the more elaborate a legal system, the more diversity it affords its country for economic activity, including opportunities for the division of labor, that is, international competition and trade.

Suggested Citation

  • Juergen G. Backhaus, 2004. "Increasing the Role of Environmental Taxes and Charges as a Policy Instrument in Developing Countries," American Journal of Economics and Sociology, Wiley Blackwell, vol. 63(5), pages 1097-1130, November.
  • Handle: RePEc:bla:ajecsc:v:63:y:2004:i:5:p:1097-1130
    DOI: 10.1111/j.1536-7150.2004.00336.x
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    References listed on IDEAS

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    1. Yeager, Leland B, 1985. "Deregulation and Monetary Reform," American Economic Review, American Economic Association, vol. 75(2), pages 103-107, May.
    2. Plamen D. Tchipev & Jurgen Backhaus & Frank Stephen (ed.), 1998. "Mass Privatisation Schemes in Central and East European Countries. Implications on Corporate Governance," ERI-BAS Books, Bulgarian Academy of Sciences - Economic Research Institute, number 9:p:1-322.
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    Cited by:

    1. Elona Pojani & Dorina Pojani, 2011. "Environmental Taxation In Central And Eastern Europe: The Case Of Albania," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 441-448, november.

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