The weakness of the tax systems in the central Andean region is one of the main obstacles to its development. In the absence of a wider-ranging, more credible fiscal pact, construction of the State becomes seriously threatened. The delegitimisation of political and economic institutions has weakened the implicit contract between citizens and the State on which the tax system is based. This institutional weakness is rooted in the social and economic structure of the countries of the region, and has generated a vicious circle that is preventing the effective reform of the tax system. Ethnic-linguistic fragmentation, social inequality and an economy that is highly dependent on natural resources have all reduced citizens’ trust and have enabled private interests to appropriate public spending. This situation has resulted in a lax attitude to taxation and dysfunctional, delegitimised institutions that undermine the foundations of the fiscal pact. In view of this situation, the study presents several alternative actions aimed at widening the scope of the tax systems, as well as improving the efficiency of international cooperation as regards taxation.

Building the fiscal pact is a long-term process in which isolated measures could prove to be counterproductive if the sequencing of policies is not taken into consideration. Control of clientelism and the appropriation of income, transparency in tax collection and spending, overcoming economic illegality, improving budget institutions and renewing the role of civil society are just some of the lines of action that will be discussed with a view to building a broad-based tax agreement in the countries in the region.

Speakers:

Joan Oriol Prats
Doctor in Political Science and Economics Graduate at UAB. Specialises in the political economy of development, public welfare policies and economic regulation. He has worked as an analyst at the International Institute for Governability and as a lecturer at several universities. He is currently working in the Technical Department of the Cabinet of the Minister for Finance and the Economy.

Iñigo Macias Aymar
Master's in Development Studies at the London School of Econòmics. Graduated in Economics and in Business Administration and Management at Pompeu Fabra University. His research interests include the economic policy of inequality and poverty, and economic institutionality in developing countries.

Remarks by:

Rafael Grasa, Lecturer in International Relations and Secretary General of the UAB