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Extractive industries and local development: a comparative study on the influence of tax and redistribution politics in three Andean countries (EID)
Start date: Jul 1, 2012, End date: Jan 9, 2017 PROJECT  FINISHED 

The goal of this project is to enhance knowledge on how the institutional context and the way in which different taxation and distribution policy regimens for mining and hydrocarbons are crafted affect the extent, nature and distribution of development opportunities in the territories where the extraction occurs. The project also aims to link this knowledge to public debates on alternatives to current systems of redistribution that might both enhance the development opportunities created by Extractive Industries (EIs).This objective will be addressed through a comparison of taxation and distribution policies for hard rock mining and hydrocarbons, and their developmental outcomes in Bolivia, Colombia and Peru. The research address a sequence of three questions:(i) How did distinct taxation and revenue distribution regimes emerge in each country? It will analyse the political context in which the policies were introduced or reformed, and how different stakeholders intervened to craft policy.(ii) Secondly, the study will examine how the way in which the EIs’ taxation regimen is designed influences the capacity of the state to promote pro-poor policies. In each country, the study will trace how the state spends natural resource revenues in terms of sectoral and geographical allocation and distribution among levels of government.(iii) Finally, the project will analyse how these policies influence development opportunities in the territories where extraction occurs by comparing how revenue redistributed to sub-national bodies is used and how effectively it is translated into investments that enhance development opportunities.The study allows to address the hypothesis that it is not only the content of the policies what matter, but the process through which these policies are designed. When polices for the taxation and redistribution of natural resource wealth are crafted through inclusive bargaining processes they are better suite to foster development.

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