State‐Building Taxation for Developing Countries: Principles for Reform

The practical implications of adopting a state‐building approach to tax reform need clarity now that the international community has come to recognise the importance of taxation as a ‘state‐building’ process. This article seeks to address this gap. It identifies seven operating principles (political inclusion; accountability and transparency; perceived fairness; effectiveness; political commitment to shared prosperity; legitimisation of social norms and economic interests; and effective revenue‐raising) as the essential characteristics for state‐building taxation, and offers recommendations on potential reforms to implement them, illustrated by DFID/World Bank tax reforms in Yemen, Sierra Leone and Vietnam.