International Studies Program¹
at the Andrew Young School of Policy Studies

The mission of the International Studies Program (ISP) is to provide academic and technical training, research and technical assistance in support of sound public policy and sustainable economic growth in transition and developing economies. Jorge Martinez-Vazquez directs the International Studies Program.

Projects

Indonesia Masters Program. The Indonesian Masters Program graduated 20 more Indonesian students in June 2003, and these students returned to Indonesia after completing internships in Atlanta and around the U.S. Six of the graduates - four from the first year program and two from the second year program - remain in the U.S. in order to further their studies at AYSPS and complete their Ph.D.s. The goal of this cooperative agreement with USAID-Indonesia has been to bring 55 Indonesian university and government workers to Georgia State University in order to earn masters degrees in economic policy. The school is applying its nationally recognized expertise in public finance research and economics instruction in this one-year program designed to improve the capabilities of Indonesia's outer-lying districts and local governments, as the country moves rapidly to decentralize its fiscal operations. The program is co-directed by James Alm and Jorge Martinez-Vazquez. (2001-2003, $3,000,000)

Peace Corps. Georgia State University has a close working relationship with the Regional Peace Corps Office in Atlanta. This relationship has been enhanced with the Proposal for a Peace Corps Master’s International Program for a Masters of Economics, Masters of Economics-Policy Track, and Masters of Public Administration, a partnership between the Andrew Young School of Policy Studies and the Peace Corps. Within the Andrew Young School, students would be able to obtain a masters degree within the Department of Economics or the Department of Public Administration and Urban Studies.

Each student will work closely with an academic advisor to exploit the synergy potential between classroom work, field experience, thesis research, directed readings, and internships, including overseas assignments.

The students will receive financial aid for their program of study. The AYSPS holds seven tuition waivers that allow out-of-state students to pay in-state tuition ($125 per credit hour for in-state versus $501 for out-of-state). These waivers are assigned to students based on criteria set by the College. Additionally, Masters students often receive assistantships that waive tuition and also provide a small stipend. The Peace Corps candidates are eligible and will compete for these waivers.

Fiscal Policy Summer Training Program 2003. The International Studies Program conducted an eight-week Fiscal Policy Summer Training Program. The training program, consisting of two three-week courses (“Tax Policy, Fiscal Analysis and Revenue Forecasting” and “Fiscal Decentralization and Local Governance”) as well as a two-week course (“Public Budgeting and Fiscal Management”), was designed by economics faculty from the Andrew Young School of Policy Studies and took place on the GSU campus in Atlanta, Ga. Senior government officials and donor agency representatives from Serbia, Uganda, Indonesia, China, Nepal, Kenya, Macedonia, and others attended the program. Training included intensive classroom sessions featuring lectures, fiscal policy analysis and simulations, case studies, group discussions, country-specific individual projects and field visits to relevant government offices such as the DeKalb County Tax Assessors office and the office of the Budgetary Responsibility Oversight Committee. This is a tuition-based program ($300,000) and has been successfully conducted every summer since Summer 2000.

Jameson Boex managed numerous facets of the Fiscal Policy Summer Training Courses. He coordinated and taught “Fiscal Decentralization and Local Governance.” Mark Rider coordinated and taught the courses on "Budgeting and Fiscal Management" and “Tax Analysis and Revenue Forecasting” during Summer 2003. Faculty throughout the school lectured during each course, including James Alm, Roy Bahl, Kelly Edmiston, Jorge Martinez-Vazquez, Benjamin P. Scafidi, David L. Sjoquist, Mary Beth Walker, and Katherine Willoughby. Ross Rubenstein, Dr. Premchand, Serdar Yilmaz and Roger Shotton gave guest lectures.

An Academic Partnership in Support of Sound Public Policy in the West Bank and Gaza. The ISP established a comprehensive partnership with the Center for Studies, Consultations and Technical Services (CSCTS) at An-Najah National University (ANNU), in Nablus, West Bank, in 2001 and 2002. The program ended in September 2003.

The overarching objective of the partnership was to achieve more responsive and accountable government in the Palestinian territories by building human capacity in academia, government, and civil society through education and training. Instead of merely proposing an exchange of faculty or students, this partnership developed a truly integrated partnership, with joint activities in academic development, applied research, and outreach and training. Specifically, the partnership aimed to enhance the academic and outreach capacities of ANNU in the field of public policy; build a strong and enduring relationship between ANNU and AYSPS; encourage sound policy reforms; and jointly engage in direct outreach activities (technical assistance, applied research and training activities) that will result in more responsive and accountable government. ($98,000)

Tanzania. In Tanzania this year, Jameson Boex, Roy Bahl and Jorge Martinez-Vazquez have continued working on the “Development of a System for Allocating Grants to Local Government Authorities in Tanzania” study. The ISP is providing technical assistance based on a solid understanding of transfer design issues and the particular situation in Tanzania. The objective of the study is to analyze the shortcomings of the present system of intergovernmental transfers and propose equitable and transparent options for allocating grants to local government authorities in Tanzania. Boex, Martinez and Bahl have been working with the Indonesian Government and technical experts to achieve this objective. Danish International Development Agency (DANIDA). This project is currently ongoing. ($201,209)

Uganda. A five-day workshop was delivered from October 13-17, 2003, by the Andrew Young School on the campus of the Uganda Management Institute (UMI) in Kampala, Uganda. The purpose of the workshop was to provide a refresher program for LGFC experts who previously attended the Andrew Young School's decentralization training programs in Atlanta. The training workshop was attended by eight participants. The program combined a number of review sessions with a number of applied sessions focusing specifically on local government finance issues in Uganda. Local governments in Uganda play an important role in the delivery of important government services. The delivery of key social services, such as education, health care, water, local roads, gender, and agriculture are delivered at the local government level. In addition, local governments play an important role in the planning and implementation of local capital development programs. ($25,728)

Jamaica. The Jamaican Government has recently awarded the International Studies Program at the Andrew Young School of Policy the task to conduct a comprehensive review of its tax structure. Jamaica has not undertaken a review of such proportions in nearly 20 years. Dean Roy Bahl was instrumental in acquiring this grant and giving ISP-AYSPS the opportunity to lead this endeavor. The AYSPS team consists of Roy Bahl, Sally Wallace, James Alm, David Sjoquist, Mark Rider and Kelly Edmiston. They will visit Jamaica several times over the course of the next year to compile a thorough and comprehensive review of the Jamaican tax structure. The results of this review will be utilized by the Government of Jamaica and the Tax Reform Committee to develop a blueprint for the ultimate reform process. ($966,499)

Russia World Bank. The AYSPS continues to be involved in the “Development of Federal and Regional Legislation on Inter-Budgetary Relations and Sub-Federal Finances” study in the Russian federation. The Andrew Young School of Policy Studies teamed up with the Institute for the Economy in Transition and the Fiscal Policy Center to build on its considerable experience as one of primary technical assistance provider to the Russian government in the area of fiscal decentralization and intergovernmental fiscal relations. Jorge Martinez-Vazquez and Jameson Boex traveled to the Russian Federation in May to continue providing technical assistance and advice. A study tour on Fiscal Federalism for Russian Intergovernmental Relations Experts was conducted during December 2003. The project provides technical assistance to the Russian Federation Ministry of Finance and is funded by a loan from the World Bank.

The project's overall aim is to increase the effectiveness of regional and local government bodies in promoting economic development and providing public services. Achievement of this objective requires solution of two related problems: (1) supporting the development and implementation of rational and responsible financial and economic policies by regional and local government bodies; and (2) increasing the financial, institutional, and organizational capacity of regional and local authorities to develop and implement effective budget policies and financial management reforms. Martinez and Boex will continue to offer their expertise in this matter. ($473,750)

Russia, Summary of Report Outputs Completed during July-December 2003 for the Russia World Bank Project include:

Russian Federation USAID Project. The ISP continues to be a subcontractor to Delloite and Touche Tohmatsu on the USAID-sponsored Fiscal Decentralization Project. Under this project, the ISP provides technical experience to the Russian Center for Fiscal Policy as it continues its role as primary U.S. technical assistance provider to the Russian government in the area of fiscal decentralization and intergovernmental fiscal relations. Through the Russian Center for Fiscal Policy, the ISP continues to work with the Russian Ministry of Finance, the State Duma, and regional governments to increase the efficiency and equity of the system of intergovernmental fiscal relations in the Russian Federation. Jorge Martinez-Vazquez and Jameson Boex have been providing continual advice and reports on these policy issues. ($225,000)

Indonesia Decentralization. In order to provide technical support to the decentralization process in Indonesia, USAID/Jakarta awarded a Task Order to a combined GSU-PADCO Team under the Sustainable Urban Management (SUM) IQC. The overall objective of the Task Order is to support successful implementation of decentralization reforms in Indonesia. The GSU-PADCO team will support these reforms by: (a) monitoring the status of decentralization reform on a quarterly basis; (b) proposing activities to improve the structure and coordination in intergovernmental relations; (c) engaging in policy analysis; (d) providing support for parliamentary strengthening whenever appropriate; and (e) supporting the nascent network of policy experts within Indonesia’s regional universities.

The ISP is concluding contract negotiations for a $300,000 contract through the SUM Indefinite Quantity Contract with PADCO to provide technical advisory services in the area of fiscal decentralization to the government of Indonesia. USAID-Indonesia.

Indonesia, Development of Intergovernmental Fiscal Review. During September 2003, Mark Rider conducted a one-week training program for 12 staff members of Indonesia’s Ministry of Finance in Jakarta, Indonesia. The training program was financed through the World Bank established in support of Indonesia’s decentralization process and institutions.

The purpose of the training course was to familiarize MOF staff with data analysis techniques and tools as well as providing them with on hands-on experience to develop an Intergovernmental Fiscal Review (IGFR). The course was specifically designed to assist with the preparation of the IGFR, but also benefited the MOF in its general role of monitoring and managing Indonesia’s fiscal decentralization process.

The IGFR is expected to strengthen transparency and accountability by enabling Parliamentarians, legislators, government officials, non-governmental organizations and civil society to monitor and analyze regional budgets. It will also help compare expenditure and revenue performance across regions, creating incentives for sub-national governments to become more responsive to their citizens’ needs. The IGFR will also be a tool by which the Government regularly monitors and evaluates its fiscal decentralization program. ($15,832)

Fiscal Reform in Support of Trade Liberalization worldwide. In July 2003, the United States Agency for International Development’s Office of Economic Growth, Agriculture and Trade (EGAT) initiated the Fiscal Reform in Support of Trade Liberalization worldwide program (known as The Fiscal Reform Project). Implemented by a consortium of Development Alternatives Inc. (DAI), BIDE and Georgia State University, the program has core funding from EGAT/EG and will respond to requests from USAID operating units to provide training, assessments, in-house expertise, and technical assistance in all areas related to fiscal reform and to fiscal aspects of trade liberalization.

As an integral part of The Fiscal Reform Project’s activities, ISP will annually develop and deliver a week-long training program on a relevant fiscal policy issue. The first annual training program, Fiscal Policy Reform: Principles and Trends, is a customized training program developed by the International Studies Program that exposes USAID officials to the principles and recent trends in fiscal policy reform, tax policy design, tax administration, budget policy, public expenditure management and fiscal decentralization. This topic-driven course will consist of lectures, seminars, and roundtable discussions. ($372,287)

Swaziland Intergovernmental Fiscal Transfers. The ISP was awarded a contract from the Ministry of Finance of Swaziland to conduct a study that will assist the Government in establishing a system for the allocation and transfer of revenue from the central government to local authorities in a predictable and timely manner that will foster efficient service provision. As part of the initiative to make local authorities more effective in service delivery and accountable to their constituencies, it is essential to match responsibilities with financial capability within the provisions of clear and binding performance measures to ensure value for money and compliance to legal requirements. Therefore, it is crucial that an analysis of an appropriate system of intergovernmental transfers put in place.

As a result, the principal objective of the study is to assist the Government in establishing a system for the allocation intergovernmental fiscal transfers from the central government to local authorities in a predictable and timely manner that fosters efficient service provision at the local government level. The study further proposes improvements in the regulatory and budgetary framework for local governments, local financial management and accounting reforms, as well as a re-orientation of the coordinating role of the Department of Urban Government within Ministry of Housing and Urban Development. ($76,778)

Decentralization Training Workshop and Technical Assistance to the Local Bodies Fiscal Commission in Nepal. The ISP is organizing a training workshop to take place in Nepal in January 2004 combined with a follow up on technical support mission to the Local Bodies Fiscal Commission (LBFC). The workshop will aim to sensitize the high level officials in the line ministries and other key government decentralization stakeholders (NPC, MoF, MLD), to build capacity of the LBFC Secretariat and other stakeholders to conduct the studies outlined in the LBFC Road Map, and to prepare some of the participants for the UNCDF/DFDP and Dasu Danida supported study tour on fiscal decentralization and local governance to Denmark and Uganda in February 2004. The technical support mission that will take place after the workshop will provide technical advice to LBFC to finalize the district level allocation formula and discuss with LBFC the forthcoming fiscal gap analysis including the elaboration of a VDC allocation formula and equalization formula.

African Public Policy Leadership Exchange: Building African Leadership for Good Governance and Sustainable Development (APPLE). This initiative proposed to USAID will strengthen public policy management and leadership capacity in Sub-Saharan Africa. APPLE’s core will be the Andrew Young African Fellows Program (AYAFP), comprising two two-year joint Master’s Degree Programs (a Masters in Applied Economics and a Masters in Public Administration) which are specially designed and tailored to the needs of African participants. Participants will attend one year at an Africa partner institution and the other at the Andrew Young School of Policy Studies at Georgia State University. APPLE will build the capacity of participants to return to their home countries as policy analysts and policy advisors; as a result, the program will be focused on subjects and policy issues important to Sub-Saharan Africa. Graduates of the program will enhance the policy analysis capability of the public sector, universities, non-governmental organizations and think tanks in their respective countries. It is anticipated that programs will be established with up to eight English-speaking countries, many of which the Andrew Young School of Policy Studies is already engaged. ($13,000,000)

South Africa Municipal Financial Management Technical Assistance Project. The ISP responded to the National Treasury of the Republic of South Africa’s search for advisory services from individuals and consulting firms to contribute towards the unfinished financial management reform agenda for the municipal/sub-national sector in South Africa. The National Treasury aims to draw upon global expertise and international best practices to design the policies that will provide an appropriate operating environment within the structural framework created for South Africa’s municipalities. It expects to retain and mobilize this expertise through an Indefinite Delivery Contract of up to three years.

Study on Fiscal and Human Resource Decentralization in Lesotho. The ISP proposed a study to the government of Lesotho suggesting equitable and transparent options for allocating grants to local government authorities in Lesotho. In addition, the team will develop a comprehensive Human Resource Plan for the new local government system in Lesotho, which will identify the minimum human resource requirements for each local council to ensure that local government services are delivered in accordance with the Local Government Act. The ISP will guide the Government of Lesotho in improving the system of local finances and developing a new intergovernmental fiscal transfer mechanism.

Montenegro Good Local Governance Project (GLG). This three-year project focuses its resources and expected outcomes on implementation of the full framework of radically new local government laws in all 21 municipalities of Montenegro. Through its participation in this project, ISP will focus on increasing better-informed citizen participation in political and economic decision-making in local governance. The concentration will be on services delivery founded on effective interaction between local governments and their citizens and citizen organizations. The intended outcomes of this project are to improve capacity of municipal governments to manage and finance professional, accountable and representative local governance on the basis of enacted republic laws and regulations; to increase citizen awareness of local government reforms and productive participation in transparent local government processes; and to tangibly improve the delivery of public administrative and communal services at the municipal scale, initially those of water/waste water management.

Building Capacity for Decentralized Financing and Deliveries of Services in Vietnam: Development and Implementation of a System of Intergovernmental Grants. Based on a solid understanding of transfer design issues and the particular situation in Vietnam, the ISP proposed to the Government of Vietnam this technical assistance project in order to offer support by analyzing the shortcomings of the present system of intergovernmental grants, developing equitable and transparent options for allocating grants to local governments in Vietnam, and guiding the implementation of the proposed reforms.

Current Indefinite Quantity Contracts (IQC)

The ISP is a member of several USAID Indefinite Quantity Contract (IQC) consortia. These contracts give USAID quick and easy way to contract out advisory services to the ISP.

Strategic Policy and Institutional Reform (SPIR) IQC, Development Alternatives, Inc. (DAI). This IQC provides services to support strategic policy and institutional reform that strengthens accountability, transparency, and effectiveness. The contract is designed to assist host country institutions and organizations and USAID in addressing policy and institutional reform issues through democratic processes. The contract addresses the frequently fatal gap between broad policy pronouncements and the tough challenges of effective institutional reform. Through the SPIR IQC, the DAI/AYSPS team can assist with programs that cut across a variety of sectors and across governance subsectors, for example, fiscal decentralization reform, local government reform, legislative strengthening, and anti-corruption in the public sector.

Sustainable Urban Management (SUM) IQC, PADCO Consortium. The SUM IQC provides advisory services, technical assistance, and training in support of USAID's goal of well-managed urbanization, and the Environment Center's strategic support objective of improved management of urbanization in targeted areas. Managed by the Office of Environment and Urban Programs, the SUM IQC delivers services in these four functional areas: expanded and equitable delivery of urban services and shelter; more effective, responsive and accountable local governments; reduced urban pollution; and credit program monitoring.

Fiscal Reform and Development in the ENI Region IQC, Deloitte Touche Tohmatsu Consortium. At a time when governments in emerging economies and donor agencies must achieve greater results with fewer resources, proven consulting ability is essential to cost-effective, successful development efforts. Working in partnership with donors, governments, enterprises and local communities, the International Studies Program and Deloitte's Emerging Markets Group have achieved positive results on technical assistance projects around the world.

Support for Economic Growth and Institutional Reform Macro- II (SEGIR- II) Financial Services IQC, Development Alternatives, Inc. (DAI). The International Studies Program is providing support to Development Alternatives, Inc. (DAI) on a Support for Economic Growth and Institutional Reform (SEGIR) Project in furtherance of USAID’s goal of helping countries achieve broad-based economic growth on a sustainable basis. The ISP will be aiding in macroeconomic policy, poverty alleviation and economic institutions and analysis.

Fiscal Reform in Support of Trade Liberalization (FRTP), SEGIR EP IQC. The International Studies Program will be enabling USAID to better address fiscal issues that arise in developing countries—especially those linked to the process of trade liberalization through this IQC. ISP will facilitate access by missions to specialized fiscal expertise and training resources, particularly identifying opportunities for fiscal reform and specific implementation activities and improve technical competence on fiscal issues among AID staff. Furthermore, ISP aims to strengthen USAID’s understanding of the many fiscal issues that confront developing and transition countries, especially as they relate to trade liberalization.

Reports

International Studies Program Working Papers

Conference Papers

The Hard to Tax: An International Perspective

The conference The Hard to Tax: An International Perspective was held on May 15-16, 2003, in Stone Mountain, Ga. The conference - sponsored by the Andrew Young School of Policy Studies - brought together leading economics and tax experts from around the globe to discuss the issue of the "Hard to Tax." Conference materials available online include conference papers, presentation slides, audio and audio presentation slides.

Friedrich Schneider
“The Size and Development of the Shadow Economy around the World and its Relation to the Hard to Tax”

James Alm and Jorge Martinez-Vazquez
“'Sizing' the Problem of the Hard to Tax”

François Vaillancourt
“Changes in the Hard to Tax over Time”

Richard Bird and Sally Wallace
“The Context for and Role of Taxation for the Hard to Tax Sector”

Victor Thuronyi
“Presumptive Taxation of the Hard to Tax”

Brian Erard and Chih-Chin Ho
“Mapping the U.S. Compliance Continuum: From Pathologically Honest to Flagrantly Defiant”

Dmitri Romanov
“Costs and Benefits of Marginal Reallocation of Tax Agency Resources in Pursuit of Hard-to-tax Groups”

William Fox and Matthew Murray
“Sales Taxation in a Global Economy”

Indira Rajaraman
“Tackling Agriculture in a Developing Country: A Proposal for India”

Michael Engelschalk and Luis Alvaro Sanchez
“Creating a Favorable Tax Environment for Small Business Development in Transition Countries”

Gérard Chambas and Catherine Araujo-Bonjean
“How to Tax Shadow Economic Activities in Sub-Saharan African Countries”

Roy Bahl
“The Hard to Tax and the Future of Taxation”

Visiting Scholars

Cintia Martinez, from the University of Santiago De Compostela, Spain, was at AYSPS from September 2003 until December 2003. She worked with Jorge Martinez-Vazquez, Neven Valev and Felix Rioja.

Dr. Benno Torgler is visiting from the University of Basel, Switzerland, from September 2003 until August 2004. He will be collaborating with AYSPS faculty members on research regarding tax morale and tax compliance.

Jan Werner was visiting from Johann Wolfgang Goethe-Universitat, Frankfurt am Main, Germany, during September 2003. Jan was researching the financing of local authorities in Germany, as well as future fiscal reforms and methods of resolution in Europe.

Wu Xue was a Visiting Scholar from the Ministry of Finance of China from November 2002 to November 2003. The focus of her research was on tax assignment and tax reform. She is a senior editor for the Fiscal Science Research Institute of the Ministry of Finance of China.

1. For a complete listing of AYSPS Active Research Sponsored Grants from CY2003, see the Appendix: Report on External Funding.