Encouraging Capital Formation in Developing Nations
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This paper provides a review of various approaches to encouraging capital formation, as well as ways of increasing the rate of saving of the residents of the Republic of North Africa. The paper also explores how to attract greater foreign investment and the role that should be played by property taxes in this initiative. In addition, the paper provides recommendations concerning two other economic development initiatives that should be considered.
Review and Discussion
Review and Discussion
From the Paper:"Any economic development initiative for the Republic of North Africa will require careful administration of the nation's scarce resources. According to Krumholz (1999), "Economic development is a process by which governments manage resources to stimulate private investment opportunities in order to generate new jobs and taxes" (p. 83). One proven method of encouraging new investments in developing nations and fuel economic development is to abate or reduce property taxes (Krumholz, 1999). In this regard, "property taxes" are defined in the conventional sense by Woodworth, Wueller, Holmes and their associates (1990) as being "a levy on taxable property according to the required percentage of capital value at a rate estimated to meet the uncovered expenditures of the tax district for the tax period" (p. 4). The use of taxes to encourage economic development is supported by Phillips and Goss who emphasize, "Economists have long argued that taxes had little impact on business location decisions, while development practitioners and elected officials ignored this advice and aggressively pursued development by using tax incentives. More recent research using improved data and methodologies has begun to show that taxes can make a difference, and the emerging consensus among economists now says that taxes do matter" (1999, p. 320)."
Sample of Sources Used:
- Bridgeo, W. (1996, September). Reduce property taxes by a third: a lesson from Australia. Public Management, 78(9), 16-17.
- Hamilton, H. (1999). A new era in farming. Forum for Applied Research and Public Policy, 14(4), 102.
- Huffman, W. E. (1998). Modernizing agriculture: A continuing process. Daedalus, 127(4), 159- 160.
- Ikhide S. (2000). Efficiency of commercial banks in Namibia. Bank of Nigeria Occasional Paper, No. 4.
- Krumholz, N. (1999). Equitable approaches to local economic development. Policy Studies Journal, 27(1), 83.
Cite this Term Paper:
Encouraging Capital Formation in Developing Nations (2013, April 30) Retrieved November 29, 2020, from https://www.academon.com/term-paper/encouraging-capital-formation-in-developing-nations-152820/
"Encouraging Capital Formation in Developing Nations" 30 April 2013. Web. 29 November. 2020. <https://www.academon.com/term-paper/encouraging-capital-formation-in-developing-nations-152820/>