Call edition 2012
A new edition of the Prize of the Belgian Development Cooperation has been launched. This call is open until March 31st, 2011. You can read in the regulations whether you comply with the criteria for participation.
Structural adjustement programmes for developing countries aim at improving their trade balance, which is necessary to service the high foreign debt. By bringing down the public expenditure combined with a large devaluation of the domestic currency, this policy has had - and still has - a considerable impact on economic systems as well as on the well being of the populations.
The originality of the author is to evaluate the situation through the tax system. After a systematic study of the national budgets, he applied econometric instruments in order to evaluate the impact of devaluation on tax revenue in Burundi. He thus demonstrates that a substantial improvement of the trade balance is uncertain when the development of a country depends on unavoidable and often incompressible import of goods while the national exports show very little elasticity to devaluation of the currency. In order to compensate this, the increase of tax should be equivalent to the devaluation, but this is not justifiable.
Through this study, conducted with lucidity, methodology and objectiveness, the author contributes in an important way to the understanding of many African economies and to debates about their future.