Local Property Taxation in South Africa: Current Performance and Challenges for the Post-Apartheid Era

As part of the many changes in post-apartheid South Africa, few large non-racial local governments replace relatively small, racially defined ones. The new constitution reserves property taxation for local governments, making it the only major tax available to localities. Property taxation is being extended into previously untaxed areas, principally those of the former black local authorities. It is expected that pressures on this tax will increase as it is called upon to finance services for the larger population Preliminary assessment-sales ratio studies for a handful of localities indicate a wide range of assessment levels. Such circumstances could undermine the acceptance and legitimacy of the tax and, perhaps, of local government. More frequent valuation might raise both assessment levels and uniformity. Systematic, widespread ratio studies and a closer look at the manner in which values are estimated are needed.     

Rationalist and Constructivist Perspectives on Reputation

This article argues for a new and broader understanding of reputation as a generally shared belief concerning a referent's character or nature, based on a range of information, associations and social cues. This is in place of the conventional rationalist definition of this concept as the degree to which an actor reliably upholds its commitments, based on a record of past behaviour. A brief literature review shows that this concept is crucial in underpinning a wide range of work in political science and economics premised on strategic interaction. The difference between a rationalist and constructivist understanding of reputation hinges on three points. Firstly, reputation is argued to be a relational concept rather than a property concept. Secondly, reputation is a social fact with an emergent, intersubjective quality, not just a collection of individual beliefs. Thirdly, rather than being an inductively derived objective record of past behaviour, reputation is based on associations, feelings and social cues. The last section of the article applies this broader conceptual understanding to two empirical examples: the importance of international organisations' reputation for their influence over policy-makers, and the way in which small states are classified as tax havens by a reputation test.     

Revenue authorities: are they the right vehicle for improved tax administration?

It is now well recognised that reforms to tax administration are as important as tax policy changes for overall fiscal reform. One institutional model of tax administration, which has been quite widely adopted in Africa in recent years, is that of the semi‐independent Revenue Authority. This approach is based on the executive agency model, widely adopted in the UK and elsewhere, as a way of improving performance of certain governmental functions. This article looks at the arguments for and against the Revenue Authority model, and examines a number of practical issues in the design of such an agency. It draws on the recent experience of Revenue Authorities in a number of countries. It concludes that the Revenue Authority model can offer an appropriate institutional framework for reforming tax administration, particular where low pay rates and rigid civil service systems inhibit effective management. However, Revenue Authorities do not solve all problems, and can only be expected to deliver results if they form part of a wider reform. Copyright © 2001 John Wiley & Sons, Ltd.     

A Reconnaissance of Alternative Measures of Effective Property Tax Rates

Informed policy discussions on local property tax reform initiatives require accurate and reliable information about the tax's current use. This paper reviews two popular measures of property tax burden and their limitations. The paper then reports the results of a reconnaissance of measures of effective property tax rates and how they vary across the 50 states. The paper also reports the findings of a 50-state survey that indicates how states calculated and reported effective property tax rates. These comparisons lead to a suggested framework for certain methodologies for calculating effective property tax rates.     

Service delivery in francophone West Africa: the challenge of balancing deconcentration and decentralisation

The article reviews the experiences with decentralisation of one West African country, Guinea, with the intent of drawing lessons and exploring approaches to assist countries in the sub‐region in rendering decentralisation—an effective means for service delivery improvements. Section II describes the West Africa context in terms of the dynamics of deconcentration–decentralisation and lays out a conceptual framework to guide the analytical assessment of countries in the sub‐region, attempting to decentralise. This framework is used in the Guinea case, described in Section III. Section IV concludes by synthesising the profile of Guinea, and positions its dominant style in relation to the proposed ideal types of decentralisation approaches. This part of the article discusses the implications of its findings for decentralisation policy and implementation, and offers some remarks on the road ahead for decentralisation in West Africa. Copyright © 2004 John Wiley & Sons, Ltd.     

A Comprehensive Model of Determinants of Property Tax Assessment Quality: Evidence in New York State

This study proposes and examines a comprehensive model for the determinants of property tax assessment quality. In addition to providing evidence in support of reform of property tax administration by institutionalizing the full market value standard, a specific revaluation cycle, and county or statewide assessment functions, this study examines the impact of the monitoring pressure of residents on the quality of assessment. The empirical results reveal that the median tax share, the median property value as a share of median income, the ratio of state aid to total expenditures, and the share of adults with college or higher education have significant impacts on the quality of property tax assessment.     

The Fiscal Impact of Federal and State Aid to Large U.S. Cities: An Empirical Analysis of Budgetary Response

This article examines four types of aid programs to thirty-nine large U.S. cities federal revenue sharing, federal categorical aid, state general aid, and state categorical aid. The central finding is that there is significant variation in the magnitude of property tax reduction resulting from different types of state general aid. Property tax credits and exemptions are less effective approaches in reducing local property taxes than are state lump-sum aid or city use of piggybacked taxes Categorical state and federal aid mostly fund additional city spending and have small but important stimulative effects on the revenue side These results suggest that differences in the design of aid programs have important implications for their fiscal impact and their effectiveness in reducing property taxes.     

Diversifying Local Government Revenue in Bosnia-Herzegovina Through an Area-Based Property Tax

After a bitter and devastating war, Bosnia and Herzegovina is making slow but steady progress rebuilding its economy and government structure. As normalcy returns, the demand for government services invariably will continue to increase, especially at the sub-entity levels of government. Unfortunately, the current fiscal structure severely restricts the resources available to local governments. This article suggests that Bosnia and Herzegovina consider adopting a property tax as a means to provide much- needed revenue. After describing the current governmental and fiscal system that has evolved since the signing of the Dayton Accords, the authors discuss why an area-based property tax, rather than a more traditional property tax based on capital value or market prices, makes sense for this country in transition.     

Public sector personnel management in three African countries: Current problems and possibilities

Following visits to three less developed countries (LDCs) in Sub-Saharan Africa (Tanzania, Kenya and Zimbabwe) to study public sector personnel systems, the author offers a review of personnel practice in Civil Service and parastatal organizations. In the main, despite a recognition that personnel issues were crucial to organizational success and thereby, ultimately, to economic development, the personnel function was found to be a largely reactive administrative operation, often combined with non-personnel ‘housekeeping’ roles and lacking a strategic role within the organization. Reasons for this restricted role are suggested and include a lack of alternative models of best personnel practice, the historical legacy of colonial administration, and the continuing need for administrative controls in the face of favouritism and corruption. Prospects for reform are considered in the light of current conditions and the view is advanced that changes in the personnel practices and policy are most desirable and urgent in the parastatal sector, and that a reformed parastatal sector might serve as a model for selective improvements to personnel management in the Civil Service.     

Accountability and Entrepreneurial Public Management: The Case of the Orange County Investment Fund

This article presents a conceptual framework that illustrates four distinct types of accountability environments facing public managers. The framework is used as a heuristic tool to examine the broad facts and contexts surrounding the bankruptcy of the Orange County, California investment pool. The framework also suggests management philosophies and strategies that are appropriate for each type of accountability environment.     

Decentralized planning in Kenya

In 1983 the Government of Kenya embarked on an accelerated programme of decentralization known as ‘District Focus’. This exercise in devolution is aimed at promoting more effective and efficient use of scarce domestic resources through efforts to strengthen planning capacity at the district level, improve horizontal integration among operating ministry field agents, and expand authority to district heads of operating ministries for managing financial and procurement aspects of local project implementation. Given the importance of this initiative to the economic growth of Kenya and the current search for administrative reforms that could help accelerate rural development in Africa, District Focus merits close attention by development experts. This article reviews the historical background, content, and implementation progress of District Focus.     

Imperfect information and the Meltzer-Richard hypothesis

Standard majority-voting models predict that redistribution is positively linked to the mean-to-median income ratio but empirical evidence is mixed. This paper shows that the different empirical reactions to rising mean-to-median income ratios can be rationalized in a simple Romer-Roberts-Meltzer-Richard framework with imperfect information. In such a model, it is important to consider the source of rising mean-to-median ratios. Income growth of the poor can lead to less redistribution as more agents perceive themselves to be rich, which tends to reduce the support for redistribution. An empirical application reveals that the model can explain a substantial part of the first Reagan tax cut.     

Do Industrial Tax Abatements Spur Property Value Growth?

Despite ongoing debate regarding the effectiveness of tax abatements, Michigan's Industrial Facilities Tax (IFT) abatement program has been widely and extensively used to boost local economic development. In this article, we estimate the effects of industrial property tax abatements on industrial, residential, and commercial property value growth in the context of regional competition for a panel of 152 communities in the five counties surrounding Detroit from 1983 through 2002. We find that: (1) offering tax abatements yields statistically significant positive impacts on industrial property value growth; (2) the impacts are larger in high tax than in low tax communities; (3) there are positive spillover effects of industrial tax abatements on residential and commercial property value growth; (4) tax abatements offered in competitor communities do not appear to influence own industrial property value growth; and (5) changes in the own as well as competitor property tax rates are important determinants of industrial property value growth. However, the fiscal benefits of tax abatements are quite small as compared with the costs of offering abatements even when spillover benefits to residential and commercial properties are considered.     

Sind Demokratien die besseren Steuerstaaten?

In the aftershock of the financial crisis many scholars and practitioners criticized the perceived loss of democratic control of national tax states. Many of these arguments are based on the assumption that democracies ought and should pursue policies that reflect the preferences of the majority of society. Hence, more democratic countries are expected to have higher tax ratios and more progressive tax systems than their autocratic counterparts. Yet, within the literature on regime type and taxation this assumption is more and more challenged. In this article, I summarize the arguments on the effect of democratic and autocratic institutions on the size and progressivity of tax states and test the effect of regime type on tax ratios and progressive taxation for 138 countries since the 1980s. My analysis illustrates that more democratic countries have higher tax ratios since the end of the Cold War. Yet, this effect varies over time and regime type plays no role for progressive taxation in general. Economic development on the other hand matters for both progressivity and size of the tax state. Income matters mostly for the tax state, not regime type.     

Rational voting applied to choice of taxes

Fulton County (Atlanta, Georgia) conducted a referendum on a local option sales tax. The referendum offered voters an opportunity to substitute a 1% sales tax for an equal amount of property taxes. The precinct level voting patterns of the referendum are analyzed using a rational voter framework. The regression results generally support the implication of the model.     

Estimating property tax base elasticity over time: Evidence on the revenue maximizing politician

The Laffer curve analysis suggests a possible policy conflict between short-run revenue maximization and long-run fiscal health. This paper estimates short-run and long-run property tax base elasticity in order to test whether such a conflict exists for the property tax in central cities. A stock adjustment model is used and separate time-series estimates for four New York State central cities lend empirical support to such a conflict. The results show that while disincentive effects associated with property tax rate increases are not strong enough to reduce proeprty tax revenue in the short-run, they are substantial enough to reduce long-run revenue in all but one city. The paper also tests for asymmetric response to property tax rate changes and finds significant results for only one city.     

The Limits and Possibilities of Volunteering: A Framework for Explaining the Scope of Volunteer Involvement in Public and Nonprofit Organizations

Despite popular rhetoric concerning the benefits of volunteerism for public and nonprofit organizations, the use and management of volunteers to assist in the delivery of services is uneven: some organizations rely heavily on volunteer labor for this purpose, while others circumscribe volunteer contributions or eschew volunteer involvement altogether. This article introduces eight dimensions of volunteer involvement—four involving organizational decisions and four regarding volunteers’ decisions—that make up the overall scope of volunteer involvement in an organization. Based on a review of the literature, the article presents a conceptual framework and several research propositions concerning how organizational characteristics, volunteer management, and environmental factors affect the overall scope of volunteer involvement in an organization.     

Full Disclosure: Unanticipated Improvements in Property Tax Uniformity

This paper contributes to two strands in the property tax literature. One thread considers the effects of full disclosure requirements or “truth in taxation” on the rate of property tax growth. The second studies the determinants of assessment uniformity. This article focuses on the role of full disclosure in changing administrative incentives and improving the uniformity of the property tax. A panel of 29 Utah counties over a 32‐year period is used in a TSCS analysis. Findings suggest there is substantial evidence that full disclosure improved uniformity in Utah, but limited evidence that it restrained property tax growth.     

Are innovative, participatory and deliberative procedures in policy making democratic and effective?

Abstract.  The overall project aims to establish a dialogue between normative democratic theory and research on policy formulation and implementation. This introductory article first notes the growth of various participatory and deliberative procedures in policy making, portrays the context of this growth and justifies the cases selected. It then presents the conceptual framework used for the study of these procedures, which mainly draws on participatory and deliberative democratic theory and the literature on the shift from 'government' to 'governance'. Based on this conceptual framework, the article focuses on four research questions the authors consider particularly important for the assessment of the contribution of the devices under scrutiny to democratic and effective decision making: questions of openness and access (input-legitimacy); questions regarding the quality of deliberation (throughput); questions of efficiency and effectiveness (output-legitimacy); and the issue of their insertion into the public space (questions of transparency and accountability).     

The Changing Property Tax and State-Local Relations

The substantial transfer of fiscal power to state government,undermining local government autonomy, characterizes the courseof state-local relations in the last quarter of the twentiethcentury in the United States. Central to this shift is diminishedlocal control of the property tax, a result of the tax limitationsadopted in most states since the 1970s. This article arguesthat control of the property tax is critical to the workingsof local representative democracy, affecting both the discretionof elected officials and participation of citizens. It presentsboth quantitative and qualitative evidence of the centralizationtrend, including changes in property-tax flows and state financesaffecting local governments, an analysis of the comparativeseverity of property-tax limitations, changes in K-12 educationfinancing, and local consequences of the tax limitations.