The World Bank and the IMF: Tax, Democracy and Shrinking Aid in Sub-Saharan Afarica

Abstract

The article focuses on three sets of questions. First, how do the World Bank and the IMF analyse the current situation in which less and less development aid is being channelled into Africa? In this connection: how do the two IFIs assess the future budgetary problems of African governments as a consequence of shrinking aid budgets? Second, how do they look upon the ongoing economic globalisation processes? Is globalisation a threat to the already weak African economies and especially to their public budgets? Third, is increased recipient taxation the answer to the pressing budgetary problems? If increased taxation is chosen as the option, will this in turn lead to growing demands for political participation and thus democracy? In the international development discourse there is definitely no general agreement with the views, analyses and policy prescriptions of the Washington institutions. In the article, therefore, the existing differing views and opposite positions on the three sets of questions are presented and discussed. The conclusion of the article is that there is a strong need for more research into the question of the possible relationship between taxation and democratisation and also of the potentially unfavourable consequences for democracy of development aid as so-called ‘un-earned income’.

Keywords:

• World Bank
• IMF
• public budgets
• aid reforms
• globalisation
• representation
• taxation
• democracy