- The role of investment incentives for structural transformation: A comparative analysis of investment incentives legislation in developing countries in sub-Saharan Africa, South Asia and South-East Asiapdf - 1.7 MB
This study is based on comparative analysis of tax and investment legislations currently used by several sub-Saharan African, South Asian and South East Asian developing countries and on country-specific cases of financial incentives in the same regions. Based on this survey, the paper individuates common and innovative practices, and investigates the potential outcomes of specific investment incentives regulations with respect to different structural transformation and inclusive development policy goals, on different agents and at different stages of development. In particular, we examine fiscal and financial incentives in relation to five policy goals related to structural transformation and inclusive development: domestic value added augmentation, local supply chains development, promotion of quality-certified production, SMEs development, and employment generation. The expected beneficial outcomes and possible drawbacks of the examined investment incentives are presented, and a number of possible regulation improvements and supportive policies are suggested. In this way, the paper aims to offer guidance about the design of investment incentives directed at structural transformation and inclusive development goals.