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 currently consists of five Ph.D. students. Three students from the first year program and two from the second year program remained in the U.S. in order to finish their studies at AYSPS and complete their Ph.D.s. The students from the first program have now finished almost all their coursework and have begun their dissertation writing process. 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 program is co-directed by James Alm and Jorge Martinez-Vazquez.

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 Peace Corps Master’s International Program for a Masters of Economics, Masters of Economics-Policy Track, and Masters of Public Administration, which stems from a partnership between the Andrew Young School of Policy Studies and the Peace Corps. Within the Andrew Young School, students are able to obtain a master's degree from the Department of Economics or the Department of Public Administration and Urban Studies.

Each student works 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 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, master's 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 2004. The International Studies Program conducted an eight-week Fiscal Policy Summer Training Program. The training courses, led by a panel of distinguished faculty and leading policy experts with worldwide experience, are designed for government officials and policy makers from developing and transition countries as well as their counterparts with international donor agencies. This year's program consists of four courses:

• Tax Policy, Fiscal Analysis and Revenue Forecasting (June 21-July 9, 2004);
• Macroeconomic Policy Choices in the Global Economy (June 28-July 9, 2004);
• Fiscal Decentralization and Local Governance (July 12-30, 2004); and
• Public Budgeting and Fiscal Management (August 2-13, 2004).

The training program was designed by economics faculty from the Andrew Young School of Policy Studies and took place on the GSU campus in Atlanta. Senior government officials and donor agency representatives from Vietnam, Indian, Kenya, Serbia, Dominican Republic, Ghana, Montenegro, Jamaica, Bhutan, South Africa, Zambia, Uganda, Indonesia, China, Nepal, Bangladesh, Tanzania, 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, Georgia Department of Revenue and the Carter Center. This is a tuition-based program ($300,000) and has been successfully conducted since 2000. The training courses were led by a panel of faculty and policy experts. Professors within AYSPS who lectured during this course included:

• Roy Bahl – Dean, Andrew Young School of Policy Studies
• James Alm – Chair, Department of Economics
• David L. Sjoquist – Director, Fiscal Research Center
• Sally Wallace – Deputy Director, Fiscal Research Center
• Shiferaw Gurmu – Department of Economics
• Katherine Willoughby – Public Administration and Urban Studies
• Felix Rioja – Department of Economics
• Neven Valev – Department of Economics
• Mark Rider – Department of Economics
• Benjamin P. Scafidi – Public Administration and Urban Studies
• Mary Beth Walker – Public Administration and Urban Studies
• Michael Rushton – Public Administration and Urban Studies
• Jameson Boex – Department of Economics

Jameson Boex managed numerous facets of the Fiscal Policy Summer Training Courses. Boex coordinated some of the courses, aided in different areas by Mark Rider and Felix Rioja. Jorge Martinez-Vazquez directed the ISP collaboration with the Department of Public Administration and Urban Studies, in which Katherine G. Willoughby served as instructional coordinator and lecturer. Ross Rubenstein, Dr. Premchand, Serdar Yilmaz and Robert McNab gave guest lectures.

Tanzania. In Tanzania this year, Jameson Boex 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 Roy Bahl have been working with the Tanzanian Government and technical experts to achieve this objective. Danish International Development Agency (DANIDA). This project is currently ongoing. ($201,209)

Tanzania. In addition to the ongoing project, Jameson Boex has also begun “Development of a Strategic Framework for the Financing of Local Governments in Tanzania.” Boex served as Team Leader for this study, which was designed to assist the Government in developing an overall and strategic framework to guide decisions on the structure of the financing of Local Government Authorities, including decisions on the structure of the system of intergovernmental transfers as well as the structure of local government taxes. ($211,000)

Jamaica. The Jamaica Tax Reform project is nearing its end. Roy Bahl, Sally Wallace, James Alm, Mark Rider, David L. Sjoquist, and Felix Rioja made several trips to Jamaica to compile a thorough and comprehensive review of the Jamaican tax structure. The Jamaican Government had awarded the International Studies Program the task to conduct a comprehensive review of its tax structure in 2003. Jamaica has not undertaken a review of such proportions in nearly 20 years. Bahl was instrumental in acquiring this grant and giving ISP-AYSPS the opportunity to lead this endeavor. 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. Roy Bahl and Sally Wallace served as co-directors of the Jamaica Tax Reform Project. ($966,499)

Fiscal Reform in Support of Trade Liberalization. In July 2003, the U.S. 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), which is implemented by a consortium of Development Alternatives Inc. (DAI), BIDE and Georgia State University. The team consists of Jorge Martinez-Vazquez, Jameson Boex, Mark Rider, Luc Noiset (ISP affiliate), and Javier Arze. Martinez-Vazquez, Boex and Arze contributed to a study on “Fiscal Policy, Fiscal Management, and Corruption," and made a presentation on corruption in Tanzania at the USAID Conference “Promoting Economic Growth in a New Era.” Officials from USAID and the World Bank were in attendance. As part of the Fiscal Reform Project, Boex led the development and delivery of a week-long training program for USAID officials on “Fiscal Policy Reform: Principles and Trends” in April 2004. ISP will annually develop and deliver a week-long training program on a relevant fiscal policy issue. As a part of this project, Rider traveled to Australia and Brazil under the India Exchange Program with Indian Ministry of Finance officials. Also under this project, ISP affiliate Noiset has traveled to Vietnam for extended periods this year. He has been helping the Congressional Budget Commission and the Ministry of Finance to develop a revenue forecasting model with projection ability of at least three years. He has also been providing the training necessary so the staff can use, update, and modify the model. ($372,000)

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-Vazquez and Boex will continue to offer their expertise in this matter. ($473,750)

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.

Guyana Intergovernmental Fiscal Transfers Training Program. ISP conducted a training workshop in Guyana on intergovernmental fiscal transfers. The training was led by Mark Rider. Andrey Timofeev accompanied him and played a pivotal role in the training. Rider was also able to meet with appropriate officials to discuss the creation of an academic link between Georgia State University and University of Guyana and to discuss the creation of a pool of resource persons to work on developing an intergovernmental transfer regime. ($25,000)

Decentralization Training Workshop and Technical Assistance to the Local Bodies Fiscal Commission in Nepal. The ISP organized a training workshop that took place in Nepal in January 2004, combined with a follow up on technical support mission to the Local Bodies Fiscal Commission (LBFC). The workshop aimed 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 took place after the workshop provided 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.

Current Indefinite Quantity Contracts (IQC)

The ISP is a member of several USAID Indefinite Quantity Contract (IQC) consortia. These contracts give USAID a 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 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 improving 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

Additional Working Papers
James Alm, Jorge Martinez-Vazquez, and Benno Torgler. Russian Attitudes Toward Paying Taxes – Before, During, and After the Transition.

James Alm and Sally Wallace. Can Developing Countries Impose an Individual Income Tax?

James Alm, Jorge Martinez-Vazquez, and Sally Wallace. Tax Amnesties and Tax Collections in the Russian Federation.

Jamaica Tax Reform Project Working Papers

Conference Papers

The conference, “The Challenges of Tax Reform in a Global Economy,” hosted by the International Studies Program, was held at Stone Mountain Park, Stone Mountain, Ga., May 24-25, 2004. Papers presented were:

Janet Holtzblatt
"Alleviating Poverty with Taxes: The Trade-offs Between Targeting and Complexity in the U.S. and Great Britain”

Arnold Harberger
“‘Coping with Inequality"

James Alm and Sally Wallace
“Can Developing Countries Impose a Personal Income Tax?”

Charles McLure
“Transfer Pricing and Tax Havens: Mending the LDC Revenue Net”

Timothy Goodspeed
“Taxation and Foreign Direct Investment”

Jack Mintz
“Tax Incentives”

Elisabeth Gugl and George Zodrow
“International Tax Competition and Tax Incentives in Developing Countries”

John Douglas Wilson
“Is Tax Competition Less Harmful with Preferential Treatment of Highly-Mobile Tax Bases?”

Kelly Edmiston and William Fox
“A Fresh Look at the VAT”

Jane Malme and Joan Youngmann
“The Property Tax in a New Environment: Lessons from International Tax Reform Efforts”

Richard Bird, Jorge Martinez-Vazquez, and Benno Torgler
“Increasing Tax Effort in Developing Countries”

Walter Hettich and Stanley Winer
“Explaining Tax Reform”

Arindam Das-Gupta
“Tax Administration and the Design of Tax Systems”

William McCarten
“Large Taxpayer Units and the VAT”

Roy Bahl
“How to Approach Comprehensive Tax Reform in the New Century”

The conference, “Challenges in the Design of Fiscal Equalization and Intergovernmental Transfers,” hosted by the International Studies Program, was held at Stone Mountain Park, Stone Mountain, Ga., October 3-5, 2004. Papers presented were:

Jeffrey Petchey and Sofia Levtchenkova
“Fiscal Capacity Equalization and Economic Efficiency”

Bert Hofman and Susana Guerra
“Ensuring Inter-regional Equity and Poverty Reduction”

Catherine Hull and Bob Searle
“The Impact of Equalization on Service Delivery”

Alex Brillantes
“Harmonizing Objectives and Outcomes at the National and Sub-National Levels through Citizen Engagement and Capacity Building”

Anwar Shah
“Grants Commissions and Other Institutional Arrangements”

Paul Bernd Spahn
“Intergovernmental Transfers: The Funding Rules and Mechanisms”

Roy Bahl and Sally Wallace
“Equalization Transfers and Vertical Sharing”

Richard Bird and Francois Vaillancourt
“Expenditure-based Equalization Transfers”

Jorge Martinez-Vazquez and Jameson Boex
“Designing Intergovernmental Equalization Transfers with Imperfect Data: Concepts, Practices, and Lessons”

Sofia Levtchenkova and Jeffrey Petchey
“A Model for Public Infrastructure Equalization in Transitional Countries”

Bob Searle
“Revenue Sharing, Natural Resources, and Fiscal Equalization”

Ehtisham Ahmad
“Fiscal Equalization, Tied Grants, and Minimum Expenditure Requirements”

Dana Weist
“Intergovernmental Loans: Their Fit into a Transfers System”

Stuti Khemani
“The Political Economy of Equalization Transfers”

Visiting Scholars

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

Dr. Jose Felix Sanz Sanz is visiting from the Universidad Complutense, in Madrid, Spain, from September 2004 until March 2005. He will be involved in editing a book with Dr. Jorge Martinez-Vazquez on the Spanish tax system as well as undertaking his own research with other members of the faculty.

Dr. Konstantin Pahev is visiting from the Center for the Study of Democracy in Sofia, Bulgaria, from October 2004 to March 2005 under the Fulbright Senior Scholarship Program. His current research interests cover taxation of small and medium-sized enterprises, taxation and international competitiveness, compliance management and measurement.

1. For a complete listing of AYSPS Active Research Sponsored Grants from CY2004, see the Appendix: Report on External Funding.