El Salvador

Construcción del Estado y Regímenes
de Tributación en América Central
Professor Aaron Schneider
University of Denver
Presentation for CEPAL
Seminario de Politica Fiscal
5/3/2013
Globalization, State-building, and Tax
• Newly emerging sectors transnational in production,
investment, markets
– Assembly manufacture, non-traditional agriculture,
services/tourism, remittances, extractive industries
• Requires state-building policies and institutions to create
and sustain strategies of accumulation
– State-building is more than formative nation-building and
Weberian modernization
– States bargain to insert national actors in international
capitalism, secure key inputs, manage social questions of
excluded groups
• Tax - particularly good place to look for the expression of
and success of state-building projects
– Pays for public goods, and represents the terms of political
community
– But, fiscal termites under globalized economy
Emerging Elites:
Cohesion
Dominance
State-building
Project
Tax Regimes:
Strategies of
accumulation
Universality
Institutions, Policies
Progressivity
Capacity
Tax Capacity: El Salvador, Honduras,
Guatemala
145
135
125
El Salvador
115
Honduras
Costa Rica
105
Guatemala
95
85
75
1990
1995
2000
2005
Source: Author calculations from United Nations data collected by the Economic
Commission of Latin America and the Caribbean (ECLAC or CEPAL, in Spanish),
www.cepal.org/ilpes
Estructura de la Élite
Instituciones Cambios en el régimen fiscal
Cohesión Dominación
Capacidad
Universalidad Progresividad
El Salvador Alta
Alta
Facilitan
Alta
Moderada
Baja
Honduras
Baja
Alta
Facilitan
Moderada
Baja
Baja
Costa Rica
Alta
Alta
Obstaculizan Baja
Baja
Neutro
Guatemala Baja
Baja
Obstaculizan Baja
Baja
Baja
Honduras Export Earnings (US$mi)
3,500.0
3,000.0
2,500.0
Non-Traditional Exports
Tourism
2,000.0
1,500.0
Worker Remittances
1,000.0
500.0
0.0
Traditional Exports
(banana, coffee)
Tax Policy
Countries in the region have only moderately increased revenues,
which remain below the regional average
Costa Rica
Raw mat, cap
imports, profit
repat
100%
Income tax
Sales/Value
added Tax
Asset tax
Municipal
taxes and
fees
100%, 10
years
Limits on
domestic
sales
25% manuf,
50% svc
Local input
+ forex
regul
None
100% for 8
years, 50%
for next 4
100%, 20
years
100%
100%, 10
years
El Salvador
100%
100%, 10
years
100%
100%, 20
years
None
None
Honduras
100%
100%
100%
100%
100%
5% manuf,
50% svc
None
Nicaragua
100%
100%, 10
years
100%
100%
100%
20-40%
None
Guatemala
100%
100%, 12
years
100%
100%
100%
20% manuf
None
Also evident
is the large
number of
privileges to
particular
sectors
Parties and Party Systems, Central America
Effective Parties*
Left**
Right**
5.05
4.93
6.03
3.02
1.94
7.67
2.67
2.63
6.69
2.95
4.85
6.18
2.24
5.65
7.03
Guatemala
El Salvador
Nicaragua
Costa Rica
Honduras
*Author calculations from national electoral results
**Source: Zoco (2006: 265).
El Salvador: Inside
Out State-building
• Emerging elites: Cohesive and Dominant
– Financial sectors coordinate
– FUSADES, ARENA
• Executive dominance, patronage in legislature
– External accumulation – dollarization, trade integration,
market liberalization
• Revenues: Reforms by fiat
– Steady increase to capacity and some universality, though fail
to tax most dynamic sectors and limited progressivity
Guatemala:
State-building
Crisis
• Emerging elites: Divided, nonDominant
– Family financial empires, CACIF tie
traditional, oligarchic, and emerging
– Fragmented, volatile, non-ideological
parties
• Lack of state-building project, weak
institutions
– Uncoordinated accumulation
• Revenues: Reform by stealth
– Limited capacity, particularism, no
progressivity
Honduras: Outside In StateBuilding
• Emerging elites: Dominant, Divided
– Family, oligopoly sectors (commerce, banking, media)
– Liberal, National Parties
• Parallel patronage exec-legis, technocratinternational
– Encourage external insertion in Honduras
• Revenues: Transnational Reform
– Occasional increases to capacity and progressivity, but
eroded by exemptions, incentives, special regimes
Costa Rica: El Estado Desgarrado
• Emerging elites: Cohesive, Dominant
– Finance, Non-traditional exports
– Move PLN to the right
• But party system instability
• Legacy of Welfare State Social and Institutional
Obstacles in Legislature, Judiciary
– Upgrade exports
• Revenues: Inertial Reform
– Moderate increases to capacity
– Limited universality, progressivity
Emerging elites and patterns of reform
Dominant
~Dominant
Cohesive
El Salvador
Reforms by Fiat
Costa Rica
1948 – Balanced Reforms
~Cohesive
Honduras
Transnational Reform
Guatemala
Reforms by Stealth
Estructura de la Élite
Instituciones Cambios en el régimen fiscal
Cohesión Dominación
Capacidad
Universalidad Progresividad
El Salvador Alta
Alta
Facilitan
Alta
Moderada
Baja
Honduras
Baja
Alta
Facilitan
Moderada
Baja
Baja
Costa Rica
Alta
Alta
Obstaculizan Baja
Baja
Neutro
Guatemala Baja
Baja
Obstaculizan Baja
Baja
Baja