Wilson Prichard Leads Session on Revenue Systems at Harvard Ministerial Leadership Forum
In April 2024, Professor Wilson Prichard, Chair of the Local Government Revenue Initiative (LoGRI), ICTD’s Executive Director, and Associate Professor, Munk School of Global Affairs & Public Policy, was invited to lead a session at Harvard University’s Ministerial Leadership Forum on “Strategic Leadership to Strengthen Revenue Systems.”
Prichard has built a global reputation for his work on international political economy, particularly in the area of taxation, government revenues and state building. He is the author of Taxation, Responsiveness, and Accountability: The Dynamics of Tax Bargaining in Sub-Saharan Africa (Cambridge University Press) and Taxing Africa (Zed Books, named a Foreign Affairs Best Book of 2019). His work has appeared in a wide range of academic journals, including the British Journal of Political Science, International Affairs, World Development, and the Journal of Development Studies.
Harvard University invited him to address finance and economic planning ministers from Africa, the Caribbean, and Latin America. The high level gathering focused on how to leverage sufficient resources to invest in stimulating sustainable economic growth at a time when a large proportion of available state revenues are consumed by servicing substantial foreign debts.
In his presentation, Prichard argued that strengthening revenue systems is not strictly a technical problem, but also an adaptive problem which depends on a deep understanding of complex systems and navigating a range of constraints on reform. He focused on four key aspects of revenue systems:
- Realistic revenue targets and continuous investment: Setting realistic targets is central to success. Prichard presented data that demonstrated significant untapped revenue potential across lower-income countries, but also that revenue increases tend to be incremental, rather than sudden, reflecting the need for continuous investments in robust tax systems and administration.
- Priority areas for revenue mobilisation: Prichard urged leaders to review their data to identify the areas of greatest revenue potential in their countries, while noting that in most lower-income countries taxes on personal income and property – especially from the wealthiest taxpayers – are the most underperforming areas of collection.
- Diagnosing underperformance: An effective diagnosis of the causes of underperformance in revenue collection is a necessary first step in designing effective reform. Prichard proposed a diagnostic approach that considers policy, administrative, and political constraints in order to capture a holistic set of reform challenges.
- Developing reform strategies: The presentation included a discussion about actionable reform strategies that are both realistic and aligned with long-term goals. Prichard suggested the importance of binding constraints analysis that identifies the most critical barriers to improved importance, while also considering the technical and political feasibility of different reform options.
Case Study: A Practical Approach to Revenue Challenges
Co-led by Honourable Nhlanhla Nene, former Minister of Finance of South Africa, and Honourable Rosine Coulibaly, former Minister of Finance of Burkina Faso, a case study asked Ministers to collectively discuss potential strategies for strengthening the taxation of wealthy taxpayers. In doing so it challenged them to weigh alternative areas of focus, technical strategies and strategies for navigating administrative and political resistance to reform.
At the heart of the discussion was a focus on the importance of having long term strategies to build systems that are trusted by taxpayers, while investing in building strong and effective administrative structures.
Future Outlook and Forum Impact
The goal of Prichard’s session – and the Forum more generally – was to provide a setting for Ministers to reflect on their key priorities, and to develop strategies for translating those priorities into action in their unique contexts. The session demonstrated how a balance of ambitious goals and practical steps contribute to a sturdy, transparent and equitable tax system.
Find out more about Wilson Prichard’s research here.
This news story was originally published here.
