The Economics and Politics of the Jamaican Tax Reform

The Jamaican tax reform project was comprehensive in terms of mandate and approach. The reform program was comprehen­sive in that it covered both policy and administra­tion, and included the development and implementation of a training plan. Most impor­tant, however, the underlying research considered both the reform of each tax in the system and how the pieces of the new system would fit together. Among other things, this meant trying to find the right set of connections among tax policy, trade policy and industrial policy. The approach taken to study the options available for Jamaica covered a wide range of concerns and drew on many different kinds of professional expertise. The nor­mative analysis of the tax structure drew mostly on the principles of neoclassical public finance theory, the feasibility of various plans was evaluated in terms of the ability of the Jamaican administration to carry alternative reform op­tions, legal constraints were included in the feasibility analysis, and the probabilities of ac­ceptance of various options were judged based on political considerations. To call the design work an exercise in political economy would not be too far off the mark. If the Jamaican tax reform study is to lay any claim to fame in this literature, it is due to this comprehensive approach