Globalization, Erosion of Tax Base, and the Revenue Potential of Developing Asia’s Foreign Exchange Reserve Build-Up

No 122, ADB Economics Working Paper Series from Asian Development Bank

Abstract: A major side effect of globalization is the erosion of the tax base due to the growing mobility of capital and the consequent international tax competition for capital. The potential loss of revenues is encouraging developing Asia's governments to look for alternative, nonconventional, nontax sources of revenue. The central objective of this paper is to explore the extent to which one potential source of nonconventional revenue—the region's soaring excess foreign exchange reserves—can help to compensate regional governments for the erosion of their tax bases. The analysis indicates that more active management of excess reserves along the lines of profit-maximizing sovereign wealth funds can indeed make a significant contribution to the region's nonconventional fiscal revenues.

Keywords: capital; developing asia; excess reserves; globalization; sovereign wealth funds (search for similar items in EconPapers)
JEL-codes: F21 H20 H63 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2008-09-01
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.adb.org/publications/globalization-ero ... ias-foreign-exchange Full text (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:adbewp:0122

Access Statistics for this paper

More papers in ADB Economics Working Paper Series from Asian Development Bank 6 ADB Avenue, Mandaluyong City, 1550 Metro Manila, Philippines. Contact information at EDIRC.
Bibliographic data for series maintained by Orlee Velarde ().