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Optimal taxation and public production in an open dual economy (English)

This paper analyses the determinants of optimal government policy in a dual economy. It concentrates on tax policy, trade policy and the selection of shadow prices for cost-benefit analysis. The paper breaks new ground by combining in one model the tax and investment policies considered in the literature on shadow pricing and incentives in the presence of tax restrictions with the notion of labour market imperfection central to contribution on the dual economy.

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Citation

Heady, Christopher Mitra, Pradeep K.

Optimal taxation and public production in an open dual economy (English). Country Policy Department discussion paper,no. CPD 1985-38 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/236411492000559224/Optimal-taxation-and-public-production-in-an-open-dual-economy