Developing countries continue to make widespread use of tax policy instruments to promote industrial and technological development. The actual effect of these instruments on business activity and government revenues, however, remains an open question. The studies presented in this volume take an...

The authors contend that in evaluating and designing investment incentives in developing economies, analysts should consider their effect on: the marginal effective tax rate (METR). Even simple tax incentives can perversely affect the METR. Many schemes have relatively generous write-offs to...