IDEAS home Printed from https://ideas.repec.org/a/eee/wdevel/v172y2023ics0305750x23001778.html
   My bibliography  Save this article

Making concessions pay? Historical vs. potential tax revenues from Laos’s rubber sector

Author

Listed:
  • Dwyer, Michael B.
  • Nanhthavong, Vong

Abstract

Under-taxation has been a prominent feature of the global land rush, figuring centrally in early concerns that transnational land deals constitute a new round of land grabbing rather than a source of productive investment. In the years since, however, under-taxation has been widely ignored in subsequent literature on state land concessions in the agri-plantation sector across the global South. To address this gap, this paper draws on ongoing research in Laos, where improved concession inventory efforts have helped stimulate a wide-ranging debate (both in and out of government) about the country’s still-opaque processes of concession taxation. We use the rubber sector to examine a pair of concession-taxation strategies that have been pursued to varying degrees both in Laos and more broadly: taxing land from the time it is alienated to a concessionaire (a land fee model), and taxing the resource itself – in this case rubber plantations – from the time they become productive (a royalty model). Using a quantitative-geographic approach enabled by Laos’s recently updated land concession inventory, we estimate potential tax revenues from rubber plantations under four taxation regimes that were deployed in various parts of the country over the last decade and a half: two of each type, with each type including higher and lower per-unit variants. Our analysis of the space of potential taxation implies significant opportunity costs inherent in the status-quo approach to taxation, which we discuss via the example of unaddressed need for concession-related compensation. Especially at the higher-end range, where taxation potentials total in the tens of millions of dollars per year, we find that Laos’s rubber-concession landscape has significant potential to help address this issue. To the degree that under-taxation is addressed in the future, however, new concession-tax revenues will increasingly be subject to spending demands from outside the rubber sector.

Suggested Citation

  • Dwyer, Michael B. & Nanhthavong, Vong, 2023. "Making concessions pay? Historical vs. potential tax revenues from Laos’s rubber sector," World Development, Elsevier, vol. 172(C).
    • Handle: RePEc:eee:wdevel:v:172:y:2023:i:c:s0305750x23001778
    DOI: 10.1016/j.worlddev.2023.106359
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0305750X23001778
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.worlddev.2023.106359?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. N. Gregory Mankiw & Matthew Weinzierl & Danny Yagan, 2009. "Optimal Taxation in Theory and Practice," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 147-174, Fall.
    2. Wegayehu Fitawek & Sheryl Hendriks & Aurélien Reys & Filippo Fossi, 2020. "The effect of large-scale agricultural investments on household food security in Madagascar," Food Security: The Science, Sociology and Economics of Food Production and Access to Food, Springer;The International Society for Plant Pathology, vol. 12(6), pages 1349-1365, December.
    3. Mutlu Özdoğan & Ian G. Baird & Michael B. Dwyer, 2018. "The Role of Remote Sensing for Understanding Large-Scale Rubber Concession Expansion in Southern Laos," Land, MDPI, vol. 7(2), pages 1-20, April.
    4. Miles Kenney-Lazar, 2018. "Governing Dispossession: Relational Land Grabbing in Laos," Annals of the American Association of Geographers, Taylor & Francis Journals, vol. 108(3), pages 679-694, May.
    5. Saturnino M. Borras & David Fig & Sofía Monsalve Suárez, 2011. "The politics of agrofuels and mega-land and water deals: insights from the ProCana case, Mozambique," Review of African Political Economy, Taylor & Francis Journals, vol. 38(128), pages 215-234, June.
    6. Keith Barney & Kanya Souksakoun, 2021. "Credit crunch: Chinese infrastructure lending and Lao sovereign debt," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 8(1), pages 94-113, January.
    7. Derek Byerlee & Klaus Deininger, 2013. "The Rise of Large Farms in Land-Abundant Countries: Do They Have a Future?," Palgrave Macmillan Books, in: Stein T. Holden & Keijiro Otsuka & Klaus Deininger (ed.), Land Tenure Reform in Asia and Africa, chapter 14, pages 333-353, Palgrave Macmillan.
    8. Baumgartner, Philipp & von Braun, Joachim & Abebaw, Degnet & Müller, Marc, 2015. "Impacts of Large-scale Land Investments on Income, Prices, and Employment: Empirical Analyses in Ethiopia," World Development, Elsevier, vol. 72(C), pages 175-190.
    9. Bottazzi, Patrick & Crespo, David & Bangura, Leonard Omar & Rist, Stephan, 2018. "Evaluating the livelihood impacts of a large-scale agricultural investment: Lessons from the case of a biofuel production company in northern Sierra Leone," Land Use Policy, Elsevier, vol. 73(C), pages 128-137.
    10. Parvathi, Priyanka & Nguyen, Trung Thanh, 2018. "Is Environmental Income Reporting Evasive in Household Surveys? Evidence From Rural Poor in Laos," Ecological Economics, Elsevier, vol. 143(C), pages 218-226.
    11. World Bank, 2020. "Lao PDR Economic Monitor, June 2020," World Bank Publications - Reports 34048, The World Bank Group.
    12. Wendy Wolford & Saturnino M. Borras Jr. & Ruth Hall & Ian Scoones & Ben White & Michael B. Dwyer, 2013. "Building the Politics Machine: Tools for ‘Resolving’ the Global Land Grab," Development and Change, International Institute of Social Studies, vol. 44(2), pages 309-333, March.
    13. Nanhthavong, Vong & Bieri, Sabin & Nguyen, Anh-Thu & Hett, Cornelia & Epprecht, Michael, 2022. "Proletarianization and gateways to precarization in the context of land-based investments for agricultural commercialization in Lao PDR," World Development, Elsevier, vol. 155(C).
    14. Gore, Charles, 2000. "The Rise and Fall of the Washington Consensus as a Paradigm for Developing Countries," World Development, Elsevier, vol. 28(5), pages 789-804, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Castet, Antoine, 2024. "The impact of large-scale land acquisitions on child food insecurity in Africa," World Development, Elsevier, vol. 179(C).
    2. Bin Yang & Jun He, 2021. "Global Land Grabbing: A Critical Review of Case Studies across the World," Land, MDPI, vol. 10(3), pages 1-19, March.
    3. Nanhthavong, Vong & Bieri, Sabin & Nguyen, Anh-Thu & Hett, Cornelia & Epprecht, Michael, 2022. "Proletarianization and gateways to precarization in the context of land-based investments for agricultural commercialization in Lao PDR," World Development, Elsevier, vol. 155(C).
    4. Glover, Steven & Jones, Sam, 2019. "Can commercial farming promote rural dynamism in sub-Saharan Africa? Evidence from Mozambique," World Development, Elsevier, vol. 114(C), pages 110-121.
    5. Lay, Jann & Nolte, Kerstin & Sipangule, Kacana, 2021. "Large-scale farms in Zambia: Locational patterns and spillovers to smallholder agriculture," World Development, Elsevier, vol. 140(C).
    6. Chilombo, Andrew & Van Der Horst, Dan, 2021. "Livelihoods and coping strategies of local communities on previous customary land in limbo of commercial agricultural development: Lessons from the farm block program in Zambia," Land Use Policy, Elsevier, vol. 104(C).
    7. Nolte, Kerstin & Voget-Kleschin, Lieske, 2014. "Consultation in Large-Scale Land Acquisitions: An Evaluation of Three Cases in Mali," World Development, Elsevier, vol. 64(C), pages 654-668.
    8. Van den Broeck, Goedele & Swinnen, Johan & Maertens, Miet, 2017. "Global value chains, large-scale farming, and poverty: Long-term effects in Senegal," Food Policy, Elsevier, vol. 66(C), pages 97-107.
    9. Herrmann, Raoul T., 2017. "Large-Scale Agricultural Investments and Smallholder Welfare: A Comparison of Wage Labor and Outgrower Channels in Tanzania," World Development, Elsevier, vol. 90(C), pages 294-310.
    10. Ernest Nkansah‐Dwamena & Hyunsoo Yoon, 2022. "Why is sub‐Saharan Africa an attractive destination to foreign land grabbers? Evidence from country characteristics," African Development Review, African Development Bank, vol. 34(2), pages 280-292, June.
    11. Abdul-Hanan Abdallah & Michael Ayamga & Joseph A. Awuni, 2023. "Impact of land grabbing on food security: evidence from Ghana," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6071-6094, July.
    12. Nolte, Kerstin & Ostermeier, Martin, 2017. "Labour Market Effects of Large-Scale Agricultural Investment: Conceptual Considerations and Estimated Employment Effects," World Development, Elsevier, vol. 98(C), pages 430-446.
    13. Makunike, Rudo E. & Kirsten, Johann F., 2018. "Engagement dynamics in large-scale investments in farmland and implications for smallholder farmers – evidence from Zambia," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 13(2), June.
    14. Bekele, Adugna Eneyew & Drabik, Dusan & Dries, Liesbeth & Heijman, Wim, 2022. "Resilience of Ethiopian Agropastoral Households in the Presence of Large-Scale Land Investments," Ecological Economics, Elsevier, vol. 200(C).
    15. Deininger, Klaus & Xia, Fang, 2016. "Quantifying Spillover Effects from Large Land-based Investment: The Case of Mozambique," World Development, Elsevier, vol. 87(C), pages 227-241.
    16. Traldi, Rebecca & Silva, Julie A. & Potapov, Peter & Tyukavina, Alexandra & Epprecht, Michael & Gore, Meredith L. & Phompila, Chittana, 2023. "Cultivating inequality? Regional rubber dynamics and implications for voluntary sustainability programs in Lao PDR," World Development, Elsevier, vol. 170(C).
    17. Osabuohien, Evans S. & Efobi, Uchenna R. & Herrmann, Raoul T. & Gitau, Ciliaka M.W., 2019. "Female labor outcomes and large-scale agricultural land investments: Macro-micro evidencefrom Tanzania," Land Use Policy, Elsevier, vol. 82(C), pages 716-728.
    18. de Juan, Alexander & Geissel, Daniel & Lay, Jann & Lohmann, Rebecca, 2022. "Large-scale land deals and social conflict: Evidence and policy implications," GIGA Working Papers 328, GIGA German Institute of Global and Area Studies.
    19. Gyapong, Adwoa Yeboah, 2020. "How and why large scale agricultural land investments do not create long-term employment benefits: A critique of the ‘state’ of labour regulations in Ghana," Land Use Policy, Elsevier, vol. 95(C).
    20. Steven Glover & Sam Jones, 2016. "Can commercial farming promote rural dynamism in sub-Saharan Africa? Evidence from Mozambique," WIDER Working Paper Series 120, World Institute for Development Economic Research (UNU-WIDER).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:wdevel:v:172:y:2023:i:c:s0305750x23001778. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/worlddev .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.