Do Public Finance Considerations Augment the Macroeconomic Dividends?
Author InfoIlene Grabel Abstract This paper examines policies to tax international private capital flows and securities transactions in developing countries. Many recent studies focus on the macroeconomic dividends associated with these policies (namely, their contribution to macroeconomic and financial stability and lengthened investor time horizons). In this paper I explore whether the potential of these policies to raise much-needed tax revenues in developing countries augments their well-known macroeconomic benefits. To my knowledge, there has been no effort to examine systematically the public finance issues related to the taxation of international private capital flows or securities transactions in the developing country context. I conclude that the public finance implications of these policies in middle-income developing countries offers additional support to the macroeconomic case for them. To different degrees, taxation of international private capital flows and securities tra
