Raising Revenue Right : A Roadmap for Domestic Resource Mobilization - Chapter 1 : A Framework for the Fiscal Frontier

Overview & Synopsis

This chapter introduces the Fiscal Frontier Framework, which examines how countries balance revenue mobilization, economic efficiency, and equity in their tax systems. It argues that, for any given level of tax revenue, countries can achieve differing outcomes depending on policy design, administrative capacity, and structural fundamentals. The framework distinguishes between countries operating on the fiscal frontier, where tradeoffs between efficiency and equity are unavoidable, and those operating below it due to weaknesses in tax policy and administration. Drawing on international examples, including Brazil’s tax reform, the chapter highlights opportunities to improve both efficiency and equity through broader tax bases, stronger compliance, and enhanced tax administration. It also explores how technology, transparency, and trust can expand the fiscal frontier, enabling governments to raise revenue more effectively while supporting redistribution and sustainable development goals.