 The topic, this is the Project on U.S. Leadership Development event, and it's called Taxes and Development, The Promise of Domestic Resource Mobilization. You know, I am really pleased, several people have said they can't put the report down. I'm not sure, you know, I recommend this for over the holiday for folks, but I do think it's, you know, it's really actually, I do think this is an important conversation. And we are, you know, I think, I want to thank Chevron for their partnership on this important project. We could not have done this without Chevron, and Chevron understands that we need capable governments that are accountable and are able to help enable private enterprise with clear rules of the game for a society of flourish. So thank you, Joanna, Nesseth, for your help. Thank you very much. I also want to thank and recognize Connor Savoy. Connor, thank you. Connor was the principal author and is the deputy director of the Project on Prosperity and Development, and he is the most gifted writer in Washington and has become a gifted thought leader as well. Connor, thank you. Very well done. I also want to thank Christina Perkins. Christina, say hello. Christina is the contributing author, and, you know, putting something like this together is a really heavy lift. There's lots of pictures in here, and so it doesn't, but in addition, there's a lot of important writing that was done and research that Christina did and made all this happen. She put this to help make sure that this got done before the holidays, and I asked some unreasonable things, and she was really reasonable about responding, so I'm very grateful, Christina. It's a heavy lift to work with strong personalities like yours truly and others, but you do a really good job, and I want to also just thank you, and a large part of the success of this work is due to you, so thank you very, very much. Let me get straight to the point. There is a lot of money from taxes, fees, savings in developing countries. There could be even a lot more money if we could get a handle on what's called illicit financial flows. Many countries, a growing number of them, are going to be able to finance their own development, so think about that for a minute. This phenomena is called domestic resource mobilization. This report focuses mainly on taxes and tax systems, but it's a big part of the domestic resource mobilization discussion, but I think, and I also think the domestic resource mobilization discussion is a big part of the conversation about governance. This launch of this report is the beginning of a larger and longer conversation that we need to have. You're going to hear a lot about how big these numbers are today, its implications for the next round of the Millennium Development Goals, and it will be front and center in mid-2015 at a big conference in Ethiopia. It also has very big implications of how we spend U.S. aid dollars. If countries can pay for their own water, can pay for their own education and pay for a lot of their own health care, and if we spend 50% of our foreign aid dollars on basic human needs, which is an important thing, what's it mean as countries can pay for their own development? I think people are beginning to get their arms around this, so something like 1% of U.S. aid dollars in overall ODA goes to things like fixing tax and financial systems, there's just not an earmark for this, there's not a political, people don't get up in the morning and say, how am I going to fix public financial systems and how am I going to get people to pay more taxes? There's not someone that's going up to the hill and lobbing a hill for an earmark on paying taxes, it just doesn't happen, and it's not super emotive and it's not super emotionally drawn you in. Now these folks are going to do a very good job making it very interesting and scintillating, but the truth of the matter is it's hard to sell this up on Capitol Hill or in other parliaments and other capitals. So I think this is going to change and I think it should change, that in terms of 1%, I think this is going to grow over time, it needs to change. So we make three big recommendations in the report, we should place domestic research mobilization and public financial management at the center of a renewed effort around good governance, increased commitments to domestic research mobilization on a bilateral level and to multi-donor trust funds, and donors need to tie the use of local systems to a corresponding commitment to improve public financial management in order to mobilize additional domestic resources. I know that's a mouthful and a little technocratic gobbledygook, but it means that we need to spend more and focus more on this stuff. I want to compliment and credit the Obama administration for being, getting ahead of this, you're going to hear from my friend Daniela Balu-Airs in a second, but I think she and folks like Eric Postal and some folks at AID really have done some very, there was a very important announcement that Secretary Kerry made a couple months ago at a speech at Georgetown about this issue, and I think you'll hear a little bit more about this. So I know that the Obama administration is aware of this and understands the importance of this, and so I want to credit them and appreciate what they're doing. So without further ado, I'm going to ask Daniela Balu-Airs, who is the senior advisor for development at the U.S. Department of State, to come up here and she's going to run through some slides, and thank you all for being here. Come on up, Daniela. Great, thanks, Dan, very much. And I'm really pleased to join on a topic today that is both very timely and has the potential to truly contribute to the type of sustained development that we all want to see. Dan's report, Dan and Connor's report on taxes and development is an important contribution, as it gives in a perspective both on the scale of the opportunity that we see, which I'll talk a little bit more about, and some clear policy recommendations to get there. And the report also highlights something that's really important, that strong domestic resources are a key element of good governance. And you know, I know that Dan has a longstanding love of taxes, and I'm glad he finally made public in this report. Yeah, I'm coming out about my love. Yeah, it's coming out. It's coming out. Higher, heavier tax burdens. That's true. Absolutely. So look, the report and the convening today, I would suggest are timely for three reasons. One, domestic resources in lower and middle income countries are already getting bigger than ever, and will continue to grow. And we share an interest with governments and further strengthening their tax base, where it was weak. Second, the US government has done historically some very interesting work in this area and is ramping up investment in DRM, albeit from a small base. And third, we're about to park on a year that has the potential to be really transformative. We have new development goals that will be agreed in September in the UN General Assembly and a financing for development agreement that will be agreed in Addis Ababa in July of this coming year. Both have the potential to shape the future of how we engage in development, both in terms of the goals we're pursuing and how we finance it. I'll talk a bit more about that agreement in a moment. But I wanted to start off with a couple of slides to just talk about the scale of the potential in domestic resources, and hopefully a kind of interesting way. So what these couple of graphs here do is look at the scale of financing for development from different sources over the last 20 odd years. I'm starting here with ODA, Development Assistance, back to 1990. So we have seen some growth in assistance, particularly after 2000. Over the past 10 years, we saw go from about 100 to 150 billion, some significant increases in health, for instance, also in places like Afghanistan. I wanted to compare that now to some of the other resource flows that we've seen in that period. So this next bucket is private financing flows. These are flows, again, from developed to developing countries over that period. And really some very significant growth. So the orange here, for instance, is foreign direct investment. And you see that it's become a much bigger piece of the pie. Remittances is pretty extraordinary. You see a really significant growth. And actually, if you were to look across lower and middle income countries, remittances is the largest single flow from the US to about a third or so of those countries. So what you're starting to see now is, as you look across the globe, FDI in some of the emerging economies as the largest remittances has kind of transitioned from lower to middle income countries, often the largest flow, and with the lower income countries still, the lowest income still assistance as the largest. And that's in African particular. And the final piece I'll overlay on here is domestic resources, domestic expenditure. And that's where you've seen the most significant growth over this period. And so really what we're talking about today is the biggest piece of the pie and we can expect to only grow more. I will say that, of course, this growth is somewhat uneven. You have countries like Brazil and China where you've had, of course, very significant growth in domestic resource base, but you would see this across the board as well. And in Africa, for instance, domestic resources are 10-fold assistance resources nearly. So just to give a little bit of a scale of the opportunity and the significance of the change and the dynamics over the past 20 years or so. So what are we doing about that? I think from a US government perspective and you'll hear more about this from my colleague from USAID on the panel, but Dan mentioned that an example of what we're doing is, for instance, an announcement that Secretary Kerry made in September, devoting 60 million dollars towards domestic resource mobilization, particularly targeting health. And the idea there is USAID working to support PEPFAR to really help countries where we're investing hundreds of millions of dollars, build up their own ability to raise domestic resources and invest them, particularly in the health sector. And there are a variety of other examples that fit in that category. So finally, I wanna get into this question of how does this relate now into the international agreements that we'll be making this next year. First, just to touch on how this relates to the overall development goals that will be agreed next September. Those goals really at the heart of them is kind of an agenda around inclusive growth and good governance. And domestic resources will be critical to achieving any of the goals, health, education, environmental related or otherwise. And while the financing for development agreement that will happen in July before those goals is a distinct agreement, it's very much seen as strong agreements on how we're going to finance sustainable development will be a critical enabler to those new goals and making them real and meaningful and actually achieved. So this just lays out a little bit of the timeline and for those of you familiar, the first financing international financing agreement for development was reached in Monterey in 2002 in many ways that was a very forward leaning agreement and already spoke to the central role of domestic resources and private investment, for instance, in development. This was reaffirmed in Doha in 2008. And now we're coming to that at us conference and the question is what's different, what's new, et cetera. And there's really a deep ending emphasis there on domestic resources and issues like illicit financial flows and how do you address them? What can we do together? And a potential to build on some of the existing commitments, for instance you've seen in the G20 around exchanging tax information, strengthening domestic resources, et cetera. One other thing I'll flag that's I think added to the agenda of domestic resources globally is the role of women and female workforce participation in broadening both driving the economy and having the potential to broaden the domestic tax base. So those are all issues that we're engaging with partners now and thinking about what does this new agreement look like and how do we shape it in a way that's really a win-win for our own engagement on development and for what countries want as well. So I'll finish off there and saying I'm really pleased to have this topic more fully on the agenda. It really takes a very strong combination of deep technical expertise as well as the really significant political will on the part of our partners to deliver on this agenda. And if we can bring those pieces together, I think we'll be setting a really interesting stage for the decades to come. Thanks. Thanks, Daniela. Please join me in thanking Daniela. Thank you. Thanks for that. Okay, great. Well, I think we have a very interesting and diverse panel with some very interesting perspectives on this. I'm gonna ask my friend, Catherine Baer, who's a division chief for Revenue Administration at the IMF. So she works on this every day. Her client base are developing countries who want help in improving their ability to manage tax systems and public financial management. So you work on this every single day. Now, you've been with the IMF since you were a child prodigy, and so you've been with there for 20 years, but you actually know this topic very, very well. And thank you for being with us, please. Thank you, Dan. It's my pleasure to be here with all of you this morning to talk about a topic that many people consider dry, but those of us at the IMF are always very excited about. And particularly because I just wanna say a couple of words, I will not show slides, but sort of speak extemporaneously. It's very interesting to work at the IMF on this topic because it's part of an overall economic reform program in most of the countries. The work that we do on helping countries mobilize revenue and improve compliance. I want to introduce that part of the equation as well because that's really what the revenue is based on, improved compliance with the tax systems is usually or in very many cases in our work, part and parcel of an overall economic strengthening program to reduce fiscal deficits, to improve the sustainability of these revenue flows over time and to do it in a more modern, in a better way at the country level. So it's a very challenging job. It's a very interesting job. It's part of a lot of other reforms that are going on. And so to work part and parcel with the macro economists, the fiscal economists in the IMF and of course in our sister institution in the World Bank and also in IFC that does a lot of work on this is a very exciting. It's a very exciting time to be involved in revenue mobilization and to see this topic picking up importance and both from the developing country perspective and from the developed countries. And I also echo Daniela's welcoming of your taxes and development report. I think it's a very nice report. And to bring this topic to the fore and touch on the major issues, ranging from why is this matter to what are countries doing and then what can we do? Very much welcomed the report and the fact that in the US this is becoming a key issue at the government level but also outside government. And that's how issues gain importance. So very much welcome it and I'll try and say a couple of words about it in my remarks. This morning I just wanna give you a bit of an idea of what the IMF does in the developing, emerging market and developed countries. And perhaps that just to highlight to you that during the European crisis the IMF became much more engaged with the developed country tax administrations than it had before and realized that there are a number of structural reforms that are also needed in many developed countries in particular in the European Union that the crisis revealed. So just to remark that this is a challenge across all income levels in IMF membership. And then also remarking to Dan's observation that in IMF we work on improving compliance and of course with a view to raising revenue levels not only with a view to a tax evasion sort of illicit financial flows which are very important but also illicit flows. How to capture illicit transaction taxes on formal transactions better. So there are different types of risks that one has to focus on and IMF tries to take a very broad view that the bread and butter of revenue administration and also areas of particular fraud and evasion that are linked to illicit financial flows but there's a great deal of potential from the illicit transactions or the formal transactions in the economy that also needs to be done. So not only to administer the tax to get more revenue but to administer the systems in a better way to administer the existing systems in a better way. So I just wanted to mention that. So let me give you a bit of an idea of the extent first of all what we do and the extent of what we do. The IMF provides technical assistance on revenue administration and tax policy. In many countries we work together with our tax policy colleagues on reform of the structure of the taxes to the structure of the taxes and modernizing the structure of the taxes which in developing countries is an ongoing effort and we provide our missions or our expert teams go from the headquarters office and also from what we have regional technical assistance centers around the world of which there are nine. Five of them are in Sub-Saharan Africa, one in the Caribbean, one in Central America, one in the Pacific Islands and there are other regional long-term regional advisors but those centers also have resident experts. So that's the modality of our delivery. We do it through technical assistance visits to the countries and also assignments where experts will look at specific issues. We work all over the world in the 188 IMF member countries and the focus of the work is how to improve on the revenue administration side, how to improve compliance levels, the management of the tax administrations and then the core functions, the fundamental workings of the tax and customs administrations in the fund member countries. We work both on the tax side and also customs administrations for those countries where social contributions are a big important part of the revenue flows. We've also advised on social contribution collections. More recently and also relating to what Daniela slides is the administration of revenues coming from the extractive industries. It's a very important revenue flow for many countries and we now have experts that are only focusing on the extractive industry work but of course always in coordination with the tax work. It's not as an isolated effort as part of the tax administrations work. Just to give you an idea, what are the average number of countries that received IMF headquarters-based technical assistance mission between 2011-2014? It was about 90 countries so half of the membership received a mission in some way or another from the IMF. So it's a considerable number of countries that are covered. In terms of revenue administration, the number of headquarters missions, that means headquarters technical teams that went to countries between 2011-2015, to give you an idea of the increasing importance of this by the countries because this is all demand led. This is all requests from the countries for help in this area. In 2011, revenue administration missions were 59 and this year they're 88. So we had one division in the IMF doing this work. Now we have two. That's why I can say I'm division chief of one of them. Dealing with Sub-Saharan Africa and Latin America, our division alone does 50 missions and my colleague Juan Toro who was former commissioner of the Chilean tax department also has around 45 missions. So it's a huge workload. On tax policy, something similar. Tax policy, the number of missions 2011 was 35 and for this year it's going to be 52 missions. This is only part of it. This is all complimented by short-term experts that follow up on specific aspects of our work. I'll give you an example, administering the VAT refund mechanism, implementing risk assessment systems, improving IT systems to allow a more modern administration of specific aspects of the tax administration. The number of short-term expert assignments in 2011 in revenue administration and tax policy was 617 and this year it's going to be 1,019. So just numbers don't matter as much as I think the orders of magnitude. That's clearly an enormous increase in the demand for this type of help from our membership. And how are we also a key issue is we need to mobilize more revenue but how much more revenue? When you look at the regions that my division works on, for example, Latin American, Sub-Saharan Africa, the average tax-to-GDP ratio is 17. Interestingly, it's 17 points of GDP for both regions because of the difference in the highest revenue to GDP. Daniela mentioned Brazil, for example, in the Western Hemisphere region but also the lowest tax-to-GDP jurisdictions like the Central American countries and some of the Caribbean countries. The same can be said for Sub-Saharan Africa. So what we've tried to do increasingly in IMF is try and get a grasp on the actual gaps. How can we quantify in a more systematic way the gap between the potential and the actual collection? And we have a program now that's in place called the Revenue Administration Gap Program that goes to countries to help them implement a more, to say, sector-oriented, a more robust methodology for measuring gaps in the different taxes. Here again, a huge range for Latin America. For example, the VAT gap in the European Union is under five for Sweden but over 40% for Romania. In Latin America, it's a huge range also from VAT non-compliance from under 20 in Chile to over 40% in Paraguay. And we have, also through this gap, exercise been able to do a couple of measures in Sub-Saharan Africa but just to give you an idea of the orders of magnitude and the challenges in the region, Uganda has a VAT gap of around 60% and then South Africa would have a VAT gap of less than 10%. So a huge differences within the regions. Pakistan is another country that has an estimated gap of 41% for the value-added tax. Just to give you an idea there of some of the numbers on the gaps. I'd also mentioned in the previous forum where we spoke that we're trying to help countries collect data on the performance measurement of their tax and customs administrations. We have an initiative too called the RAFIT program, Revenue Administration Fiscal Information Tool. And what we tried to do there is have a web-paced platform where countries can input the data on various aspects of their tax administration performance. Stuff that sounds boring but is the underlying statistics that explain revenue, how revenue is doing, for example, on-time filing, tax arrears, the types of audits that are carried out, times for processing imports and exports, et cetera. So that's an important initiative and that's also complemented by the TADAT which you mentioned in your report and that's also an assessment tool that's been designed that's similar to those of you who know on the public finance side, the PIFA assessment on the revenue side that TADAT looks to provide a country with a standardized assessment of the outcomes of the effectiveness of their tax administration based on nine different aspects of administrative performance. And my final point, as I know, I don't wanna go over my, a lot of time, but very important for us is the work that is undergoing with, and the work that other organizations are doing. As I mentioned briefly to Dan and colleagues before we came to speak to you this morning, this is a tremendous job to be done in the developing countries and emerging market countries and really it can only be done effectively if we all work together. We're very pleased to have a very close, a collaborative relationship with USOTA. We work now with our colleagues in USAID and in this initiative that Daniela mentioned, we look forward to working with them in the Sub-Saharan African countries. In Latin America, we work closely with the Inter-American Development Bank. Also, USAID has a number of initiatives in the OTA in the Caribbean. So the importance just to highlight the importance of working together, knowing what each other is doing so that we can work in a coordinated way and get more results from this technical assistance. And finally, of course, the fact that from the IMS point of view, the donor interest on this issue has clearly increased. We now have, in addition to the trust funds that Dan mentioned, for the Tax Policy and Administration, which covers the low income countries. There's also a trust fund for managing natural resource wealth. The government of Japan, the Swiss government, the European Commission and Canada, just to name the major donors that fund our operations. So a tremendous increase in interest and resources devoted to this on behalf of the member countries of the IMF who are also donors. With that, I'll wrap up. Thank you. Thank you very much, Catherine. Thank you. Thank you. Thank you. As you can see, there's quite a lot going on and there's been an increased amount of demand from client governments on this just in the last four years. And I think the order of magnitude speaks for itself. And so thank you for that. Thank you, Catherine. Greg, thanks for being with us. You're the Director of Aid Effectiveness for Oxfam Center. You have a different perspective on this, but related to this. And I think I know that Oxfam see this as also an important conversation as well. So thanks for being with us. No problem. Thanks, Dan. And so glad you guys are doing this and bringing this up, especially at this time. As everybody's mentioned, Addis is gonna be an important moment to actually figure out how we make all the pieces of the puzzle work here. So I think this is a very timely report. I wanna take a second to mention the maybe the big development news of today, which is Raj Shah stepping down. And I, you know, we're, I think for the past five years we've had a really terrific visionary development leader at USAID. He's gonna be missed, particularly because I think he's been instrumental in helping the United States use all the tools of its power to influence, to bring to bear on the development problem. Not, our influence is America first and foremost. And I think this is at the heart of this conversation. Our influence is not first and foremost about the volume of ODA we provide. There are so many different forms of leadership. We can provide intellectual leadership, policy, technical and technological leadership. And Raj has been central, I think, to making that happen. So he's gonna be missed. But I wanted to, I think this is an important conversation. I believe that labeling it tax is almost undersells it from my perspective. Because for us, this is really a conversation about democracy and democratic and accountable governance. And so we're very happy that you guys have brought this, put this report forward, brought this event together. If you believe that development is actually the product of a compact between effective governments and active citizens, the key problem we face is that too many governments just lack the resources to hold up their end of the bargain. There are a billion people living on less than $1.25 a day and more than 80% of those people actually live in countries where the government is spending less than $1,000 annually per capita on delivering public services. By contrast, in the United States we're spending about $21,000 per year per capita. So there's a huge gap in these countries' ability to even meet the demands that their citizens are providing. ODA cannot fix this. We're not gonna solve this problem with aid, but there's a lot that aid can do to help us solve this problem. And without ODA, without maintaining the investment in ODA we've made, it's gonna take a lot longer to solve this and a lot more people are gonna suffer in the meantime. So while domestic resources are ultimately the solution, ODA needs to be a contributing factor there too. The key though is because ODA can't solve this problem is for us to have the right perspective on how we can actually impact this accountability challenge. Because this is a problem we cannot solve from Washington. Good governance only emerges in response to demand. We cannot solve the problem simply by investing in the right technical solutions and expecting that the demand will emerge to meet that. We actually have to be investing in the ability of citizens to hold their own governments accountable. And this is one of the criticisms I have of the report that you guys have put out, which I think on the whole deals very well with the big challenges here. But I would push back on the idea that there's a neat sequencing that you can demand from Washington that governments put the right systems in place before you start investing in how those systems actually function. You can't sequence it in that way. We need to be both investing in the technical solutions and helping as Catherine has explained the great work that the IMF is doing on actually responding to demand from governments for improving their technical and technological capacity. But meanwhile investing in the capacity of citizens to actually demand that their governments respond better. Because ultimately these systems will not be sustainable and history has shown us that the systems are not sustainable when they're not paired with that demand from citizens. There are too many white elephant projects that donors have invested in over the past decades where we built a computer system in the finance ministry that never got used or we helped set up a supreme audit authority that gets marginalized and doesn't actually end up being able to actually hold officials accountable. Yeah, and have any teeth. It's only in response to that political demand in the country. So what can we do? One of the most important things we can do is be transparent. And unfortunately despite the ethos of transparency we have here in our own government, a lot of that hasn't actually translated to how we behave as a country abroad. The United States government for the past few years has been trying to put a lot more information about our foreign assistance programs online. Unfortunately that information is still very thin and it's not particularly usable by the activists who are trying to actually use it for accountability efforts. So that's one thing that the United States government really needs to accelerate. Another is the transparency of our private sector investment. If the key to solving the development challenge is actually making sure that countries have more control over the resources from their own economies, we really need to look at how our policies and practices influence this. A key sector here of course in many countries is the extractive sector. And I think it's great that Chevron has sponsored this event and is helping bring attention to the issue of domestic resource mobilization. Oxfam is actually a Chevron shareholder. But we think that there's a lot more that the United States government can be doing to make sure that these revenues are actually transparent and can be held accountable by citizens. The amount of ODA that the United States gives to sub-Saharan Africa every year is about $9 billion right now. We estimate as Oxfam that through trade mispricing, poor invoicing, tax exemptions, misreporting of export volumes that about a billion dollars a week is being lost to African economies and African governments of extractives revenue that should actually be part of those national budgets and should be being spent on public services. We have a law here in the United States, section 1604 of the Dodd-Frank Act that requires extractives companies that raise money on US markets to disclose their payments to governments. And unfortunately the trade association for oil companies here, the American Petroleum Institute has been going to court to fight the SEC on even releasing that rule. So an additional thing that Chevron could do to advance this is to actually call on their trade association to stop fighting against the SEC issuing that rule so we could actually get more data in the hands of the citizen activists who are actually trying to hold their governments accountable for spending. Finally, I think there's a big opportunity here at Addis to address this on the global scale. I think there's a good argument to be made that American firms can't on their own go ahead and start changing their behavior in terms of reporting and paying taxes that they're currently avoiding unless there are global rules in place that encourage better tax practice. Addis gives us a great opportunity to do that. Taxes and better transparency around taxes need to be a part of the conversation at Addis and we need good global standards that can actually help governments and citizens in developing countries have more control over these domestic resources. Good, thank you. Okay, Mark, you're a KPMG, you are a recovering accountant, but you also work on international development issues. You work on, it's a KPMG's a consultancy, it's also an accounting firm. You work with governments, you work with companies, so there's a whole series of issues that relate to your day job and the work that your firm does worldwide, so I suspect you've got views on a number of pieces of this conversation. Thanks, Dan, and good morning, everyone. As a tax partner in KPMG, it's baffling to me why we all don't wake up thinking about tax reform. But I think the report here, and congratulations to Dan, Connor, and their team in adding this contribution to this discussion, I think it's quite compelling about the why. Why are we talking about this? And not just in terms of the development context, but also governments and in terms of the incentive for them to engage in this debate. We've already heard from the IMF that there's demand from governments to get this type of technical assistance to improve their tax mobilization and resources. So I'm not gonna focus on that, I'm gonna focus on the how. And I gotta touch on three main points. Institutional building, inclusion, and then policy. So institutional building, I think anyone who's involved in development, this is an essential part to any kind of reform, and certainly is the case within the tax sector as well. But what does it mean in practice? We've seen some successes and the report is quite good at highlighting some case studies in relation to the type of long-term investment that's required, not just by the aid and development sector and the various partners involved in that, but also from the governments themselves. So let me digest for a second. Yesterday there was a little bit of a blog or an interview with Paul Farmer, talking about obviously the health sector, but he was talking about long-term investments to build institutional capacity within that sector. And I think he called us the kind of the devil. And what he meant by that was, we're so fixated on programmatic cycles and we're obsessed with workshops or technical assistance and so forth. And he was making the case for residencies. That's what we do here in the US, that's what we do in the Western Hemisphere by and large within the health sector. So why not in the areas that we want to provide support to in the beneficiary countries? I think the same is true within the tax sector. There is one case study within the report related to Zambia, it's a country very dear to my heart, my wife is from Zambia, I spent many years there. Back in the late 90s and early 2000s, I was involved in some of the early reforms with the ZRA, the Zambia Revenue Authority. And there really was a focus there on long-term support, not just at the policy level in terms of how the IMF could support, but if it really went into the weeds and spent multiple years there. But outside of that, there was a lot of engagement from the social sector and the private sector in Zambia to support a kind of a throughput of capacity. And one good example I'll mention there was the ACCA, the Chartered Accounts Institute out of the UK set up a regional base to support, train and accredit a cohort of accountants in Zambia and it's still there today. Not just in Zambia, but for the region. It's no accident that the ZRA had an institutional capacity or a numbers issue when they basically started on this reform process. And this school was established in the late 90s and many of those graduates then became ZRA officials, raw but commercially literate. So I think we wanna have that debate in relation to how can governments and the broader sector within each jurisdiction can support these broader reforms. Moving on then to inclusion. I think the case is also well made in the report relation to the broadening of the tax base. But this is a difficult topic. Taxes are very emotive, very political. But what does it mean in relation to inclusion? One good example that we always use, India 1.2 billion population is 38 million taxpayers. How does that create a sense of trust and social contract within a populace to promote the deepening of service that be provided related to the use of the taxes that you would recover? So it's not just about receiving taxes. It's also about how you use them. So inclusion is part of that debate and it's often the result of that debate. And how do you involve not only your constituents in terms of taxpayers, but defining what the taxpayers are? We've heard today about the increase in foreign direct investment. So it's not just about bringing in the informal sector within your own populace, but it's also about institutional investors who may be coming in from outside in the influence that they may have in relation to that inclusion debate. Also demographics have a huge issue here. The potential, again, is well-made in the report, but if you look at Africa alone, one billion people today were probably gonna double that by 2030. How are the revenue authorities able to prepare for that? Does that mean there's gonna be a shift in their policy and their capacity in terms of how they access and engage with their tax constituents? That obviously then fits into policy. Naturally, from our perspective, and you may not know this, but KPMG is global, but we're very much led at a national level. And we do see the tax policy debate led by national governments as it should be. But they're huge international influences, not just by support like the IMF and others, but you also have the WTO. You also have foreign direct investment. We've also talked about the impact of extractives. There are many tax jurisdictions today that you reflect a very narrow base in terms of tax payers, but you have a broad kind of pull from that narrow base. Do you want to progress from that kind of model, which is largely an extractive-based model, to one where you have a broader base of tax payers, but you're probably taking less from them, which is more in line with what you would expect to see in OECD countries. And over time, we've seen a... Your phone's going off. I thought that was... I thought that was one of those... Somebody's phone's going off. Those prompts for me to wind up, and I'll do that in a moment. I dialed it from here. No, no, it's not. No, it actually isn't. Keep going. You have time. But we have seen this shift, because when I was training, it was very easy for us to get our hands around this kind of tax regime issue. You had a kind of an evasion, which was illegal and unethical, to one that was more of an avoidance type of approach, which was legal, and some would regard that as ethical. But today, the debate has shifted. We also have those two situations, but you have a kind of an aggressive avoidance, which is technically legal, but is it ethical? And there's many examples for that. The one that's probably getting the most press, certainly from my part of the world, is Starbucks in the UK, totally legal, but a lot of public debate about whether that's ethical or not, and I'm not going to comment on that. You're not a client, by the way. But those are issues for any government to consider with respect to tax policy. And then just to wrap up on that, there's some broader issues as well. If you have a government in a fragile state, you have a decision to make. Do you try and promote reform and institutional billing, capacity billing, within the existing tax regime and tax authority that you have, or do you scrap it and start from scratch? That's not an easy thing to consider and address, but perhaps it's an important question. You also have to understand, as I mentioned, do you go narrow and try and start from that perspective, or do you go broad? And if you do that, how does that impact your social contract with your constituents? And I think that was a point made earlier in terms of what is an equitable return on how you use the money. So in closing, we're fully convinced, as you can imagine, in relation to this whole topic. We're delighted that the contribution has been made. We're convinced about the why. Now it's about the how. Thank you. Thank you very much, Mark. You just turned off your microphone. Bob, thanks for being with us. You're with USAID. You work on these issues at AID and support aid missions on this. I suspect you and your colleagues, such as Eric Postal, worked with Daniella, Blue Air's on the announcement that the Secretary made back in September on this issue of looking at using US government additional, US government resources to improve public financial management and domestic research mobilization as it relates to health systems in particular. So thanks for being with us and I appreciate you all being here. I know this is a topic close to your heart, so please, the floor is yours. Thank you. Well, thank you, Dan, for the opportunity and thank you also to you and Connor and the rest of your team for putting together this really excellent report that gives an overview of the importance of DRM and strikes to many of the important trends that we've seen in the last few years. One of those points I wanted to seem to resonate with me, I wanted to point them out, but before I started, I just wanted to mention that taking up sort of a broader context, there's been a number of notifications or statements that aid flows are not rising as quickly as other kinds of flows. And I think if you think of this in a broader context, it's perfectly understandable why not. I mean, USAID and other donors deal with a broader range of countries ranging from basket cases up to the near graduation. Obviously people are trapped in poverty at the basket case level, have a larger percentage of their budget. That's the technical term we use at think tanks as well. Exactly. Have a larger percentage of their budget provided by ODA and as they move up, that percentage declines. Well, what we've seen in the last 20 or 25 years, but an increasing level of income throughout the developing world. And so naturally you're seeing the aid flows being not as important as opposed to other flows. In fact, as an aid practitioner, I would like to take credit for some of that and say, we have worked very hard to make sure that the playing field is leveled to allow additional foreign direct investment that taxes are lowered where possible, particularly in terms of trade, so that you can have trade between nations that's easier for businesses to operate. And all those things have helped enable the more rapid growth in economic activity throughout the world. So I take this as these more rapid surges as a success story for aid. Of course, you have to consider the source. I've just come back from El Salvador, which to me is the poster child for DRM. There's a number of things that happened in El Salvador that are consistent with what I pointed out by the report and some of my colleagues. Since 1990s, they've doubled the per capita spending on health, education, and social protection because they have enjoyed rapid growth and they've also enjoyed an increased level of tax revenues being collected. And they've done this through a variety of measures. First, of course, being the most important, the commitment of the government of El Salvador to having more revenues collected. And second, consistency of effort. They, like Senegal, which was cited in the report, have been working on this since the 1990s. They got a bigger push starting in 2004 when a use aid project developed, although as noted, we rarely operate in a back room. We often have colleagues from the IMF or from Treasury or from other donors that are helpful in this regard. But for us, at least, the big push started in 2004 and we invested over the next five years, about $5.8 million. The government of El Salvador matched that number. And between the two, you saw that the revenue increased by 1.5 billion. That's a permanent increase, right? That's ongoing or? Inshallah. Inshallah. But yes. Right. It's sort of like the fight between good versus evil. So $10 million for 1.5 billion bucks in taxes collected. Right, that's about 300 to one. That's pretty good. I think that's pretty good. Now, what else do we do in order to try and make that happen? Well, the program over the course of years evolved, but one of the first things that they did was they put together a call center to allow people to call in to ask them questions about taxes. People are willing to pay taxes if, in fact, you make it easier for them. And the call center generated an increase of 10 foals and a number of inquiries coming from the public as to how you pay your taxes. Another thing that that call center allowed people to do was it also allowed a tax advocacy organization to be set up. So, you know, if you were a taxpayer and you were dealing with a tax collector who wasn't being fair, transparent, and honest, who would have thought that happens? You know, you could go to the tax advocacy. They would protect you and they would help you out. That, of course, had the dual benefit of not only helping the taxpayer, but also helping collect more money for the government since you didn't have it as much diverted off to the tax collector. This was followed by anti-corruption drives, by aggressive fraud, prosecution, and all of those things helped. But the key thing that you saw in El Salvador that you've seen in most places around the world was computerization. If you can bring it to computer, it has a number of benefits. It increases the productivity of the people who are working on the projects, but it also allows you to step back and not have the person-to-person interaction that is so common in the less developed countries. And whenever you have person-to-person interaction, you have the opportunity, or increased opportunity, for some side payments to take place which don't exactly benefit the government. Now, El Salvador has not gotten to the point of Chile, which was mentioned in the report, is having 97% of its tax filings allotted by electronically, but it's working in that direction. That's certainly the goal. Now, one of the things you have to think of is El Salvador is one of the most successful of the projects that we've had. But even if you don't have the most successful, even if you have sort of a middling level of success in tax rate, tax mobilization, you still get about 50 bucks for every dollar you invest in increased tax collection. So if you've ever been a businessman, this sounds like a really good deal, and you wonder why governments don't invest more in it. And well, there is an answer to it. First of all, as we heard from my colleague from the IMF, there's a lot of interest around the world in doing that. But the IMF is not able to provide sort of long-term assistance or big projects that'll come in and send in missions that are helpful, but for the heavy lift, you need a larger commitment of funds. And quite frankly, you also need outside help because a lot of what's involved is change management. You can't go into an organization and try and expect its DNA to be changed by working with that organization unless you have a very unusual set of circumstances and very highly talented leader. If you bring in somebody from the outside, it increases your chance of success significantly. And then that comes to the question of, well, if it's so good, Bob, why aren't you doing more of it? And I'd love to do it, but unfortunately, there's that budget issue that Dan has mentioned before. And we also always have problems with budget, but increasingly we've found that there are other calls for other segments of the budget and economic growth tends to be something that is left over at the very end. So just in summary, I wanted to say that this conclude that this was a great report and it recognizes and documents the growing interest that we've had worldwide in domestic gravitational mobilization. If you believe my thesis that it's the developing world developing that's causing this increase, then we're gonna see even more activity and more interest as we go through time. And last but not least, I have up here a nice little folder that I'd like each of you to have if you come up and take one, I'd appreciate it. In a less sophisticated audience, I'd say it's free and encourage them, but since you're all tax person people, you know you've paid for it, so you might as well come up and get your fair share. Thank you, Dan. Thank you very, very much. Thank you, Bob. I wanna come back to a point that Greg made about holding governments accountable. Catherine, could you just reflect a little bit on the issue? What is driving some of the increased demand? Is some of this about civil society saying, hey, fix my tax systems? Is this governments of various stripes saying, I think there's more money out there? What's driving the increased demand? Well, that's a very good question and I think as usual, there are lots of different factors here at play, but one of the impressions, clear impressions that one gets from meeting the delegations, for example, when they come to DC is that there's just an increasing seriousness at the government level that these services have to be run better and that it's not just the compliance aspect, but the service aspect to the citizenry. So there's, I would say an increased awareness of the impact of this on the overall society and partly has to do with the fact that there's more media in the countries, that there's more communication channels in the countries, that there are more civil service society organizations in the countries. There's just a number of different factors here at play, but I think the governments feel very much more under the gun and sort of concern that they need to meet better standards and really show improvements, not only to the IMF, but to their own citizenry and part into their own taxpayers. And so there's that pressure that's going on. I think the other thing too is that they, and something that hasn't perhaps been mentioned so much, the word, that they want to professionalize the administration. There's this aspect of we can't be working on this ad hoc basis so much. How do we make these organizations more professional? And that's something that goes to address a lot of issues, accepting accountability, having greater transparency, not only sort of anti-corruption, but pro-integrity. Like how do, and countries are concerned about, increasingly concerned about, how can we professionalize the administration? So of course not all of them, but many of them. So that's sort of some impressions coming from the work we have from our conversations with the various country authority. Well, you work, you know, there's a lot more democracies than there used to be in Latin America. And there may be an additional one in Cuba, God willing, sometime soon, given some of the announcements today. But I'm not gonna hold my breath, but we'll see. But I think the, and then you've got an increasing amount of democratic governance in Africa. How much of your client base are, let's say, responding to, so just a little, let me just push a little bit further in terms of say that these are from societies that have sort of more open societies where there's, and I think you sort of alluded to this, is this mainly coming, I mean, are these coming from the Singapores of the world, or, you know, in your regions, are these coming, or the Cubas of your world, are these coming more from sort of more open societies that are more democratic in nature, if I can put it that way. I wouldn't ask you to characterize them that way as a civil servant for an organization that doesn't comment on politics. But could you just a little bit further about where is this coming from? Is it, maybe you might just, if you might. Yeah, as you say, I mean, really it's all over, Dan. I would say it's really all over the spectrum from the more sort of politically open to the more countries that haven't perhaps gone undergone that transition, but it's a tremendous variety of sources for interest on this, and part of it has to do also with the realities of the world economy, you know, international competition for tax revenues, the volatility of the natural resource, you know, the oil prices and natural gas prices. So there are a lot of different reasons. I really couldn't say one or the other, but perhaps what is different is then the quality, the focus of the types of reforms that the countries want. Perhaps more openness towards the, you know, the idea that there has to be greater taxpayer services, you know, you mentioned the call center, something as basic as a call center, a taxpayer advocacy, that the degree of interest in these types of figures, in these types of mechanisms will differ a lot across countries. So I couldn't sort of say, you know, there's a pattern there, but that those are the countries where you see there's a greater openness, you know, too. Catherine, let me just push a little bit further something Mark said about, do you scrap what you got, or do you work without what you have, or do you just tear it down and start all over again? I know you have a view on that. Well, in our conversation prior to coming to this, one of our colleagues said, these reforms take a long time, and so there is some kind of decision points for some countries, to what extent can you make very significant breaks with, you know, institutions, because if you tear something down, I mean, it has to be so broken to have an argument or a case for building it up. We have, for example, the issue of the revenue authorities. At some point in the 90s, a lot of countries came to the IMF and said, can you help us set up a revenue authority and that's going to solve our tax collection problem? And we said, well, it can, but you can't not do these fundamental reforms that you would have to do anyway. The idea there was a revenue authority would provide more flexibility on budget and HR kinds of issues, better stable more stable funding over time. So I would say you have to work with what you have to the best extent possible. Sometimes it's so broken that even the countries themselves say we need to make some fundamental changes and some of them have. I mean, in Latin America, in English-speaking Africa, this figure of the revenue authority is quite a change from the way that the organizations had been run previously. And I think it's been on the whole a positive change, but you can't avoid the hard, you have to do your homework at the same times. Bob, I want to bring you in. I want to come back to something you said. We talked about this on the phone, so I'm going to ask a leading question, which is about the investment climate, because I do think this is important. An important part of the increased amount of tax revenues being collected is about companies that are participating in the formal economy, the tax-paying rule-o-bang economy. I think a lot of that, my view, is that the advice that they're getting from the World Bank and other organizations like the USAID around investment climate and the doing business indicators, I think has been a big part of it. Would you agree with that and could you expand a little bit on that? Yes, I obviously agree. The World Bank's IFCs doing business indicators have been something that's gotten a lot of attention in the last decade. USAID has helped finance that. We strongly believe that if you can measure it, it's going to be something that people are going to take action on, and we've seen consistent sustained improvement around the world in the measures that are shown there in the number of days that are involved in clearing things for reports or the number of days it takes to start a business or shut down a business. And wherever you find that there is going to be an increase in the ease of doing business, you're going to find there's more business that's being done. And that is more likely to happen in a formal environment and formal firms are more likely to have better jobs and provide better social protection, better health and educational opportunities. So this is really a win-win. And I think that's a good part of why it is what we've seen such an improvement in world conditions. I want to take some questions from the audience. You all have been very patient. So I'm going to take some hands and we'll do this World Bank style or Bretton Woods group style since my friend from the IMF is here. So I'm here from Steve Mosley. I want to hear from Larry McDonald from OTA. I want to hear from Jim Michael. I want a little gender balance. So I'm here from Casey Dunning. So that's the four. Those are the four. Steve, you microphone, microphone. You're also gifted with a big voice. Great panel, great report. You didn't address two things. One, could you talk a little bit about how going into Addis, you see revenue accountability and increase relating to the people needs, the equity issues. The report suggests that maybe we're going to have to link this to some kind of policy linkage as with more revenues to make sure that the social outcomes investment are related. None of you really talked about what kind of expectation should we have of governments if we help them to increase their revenues through this process or they help themselves to make sure there's a link. The other is you didn't talk about local versus national in terms of reform and going back to Greg's comments. If citizens are going to really be advocates and support they have to see the relationship between what comes back to them locally versus what they're paying locally and how they relate that. Everything was the national level in your conversation. Great conversation though, thank you. Larry, here's the mic, are you got the mic? Yeah. Great. You're a treasury OTA. Yeah, it's Larry McDonald. I'm the DAS for Technical Assistance Policy at the US Treasury Department. Great session, really important topic. A lot of useful and promising things going on here and as the title of the session says, the promise of domestic resource mobilization. My question is what are the things that sort of keep you up at night in this area? Is there one or two things? I mean, there's some good recommendations in the report and the various remarks people noted, things that would be helpful, computerization is one. What are the one or two things that really stand out in your mind as the difficult challenges if we're going to realize the potential of more DRM? And I'll tell you just quickly, not to guide anybody's answer. The thing that keeps me awake at night is the sort of the nexus between technical and political. To oversummarize the experience of Treasury's program, in many instances, we have good traction at the technical level and we've been invited in, there's demand, we don't just go in of our own accord, but there comes a day, it might be two years or even three years into the collaboration when the people and the institutions you've been working with are ready to go forth and put their skills and capabilities to work in the customs administration and so on, and something happens. Somebody steps in and it just problems happen. And for my part, the critical nexus is that nexus between institution building and political will. And I think back to Greg's points about how this ultimately relates to things like democracy and civil sort of civil societies role. But that's my question is, what is the one or two things that really stand out as challenges for you? Ambassador Jim Michael. Okay, thank you. I wanna join in commending CSIS on the report and the panel on really providing some very insightful views. It's been a very interesting morning. I'm struck by the direct relevance of this to the Busan vision. If you look at the five principles that they set out in making this paradigm shift from a focus on aid effectiveness to meeting the challenges of effective development, the second item there is greater reliance on domestic resources and accountability to citizens for the use of those resources. And this is the virtuous circle because if you're going to have a tax system that collects more money, it's going to have to satisfy the citizens by how that money is spent, the quality of delivery, the dealing with the corruption and the illicit flows. It really is making government and the economy work in a constructive collaboration. The missing piece though, I think, is measuring all of this. And one of the things that I found in my own research is that the data on domestic, both government and private capital formation in the developing countries is lousy and that we don't know oftentimes. The European Union says that illicit flows from developing countries are 600 billion a year. The government financial integrity NGL says it's 900 billion. It's not that one is right and one is wrong, it's that we really don't know. So we're talking about real money. And so I wonder what the panelists think about efforts and there are some to improve the quality of information and the availability, the point that Greg made, but making that information available to publics so that you create incentives for this virtuous circle. Just before you give up the microphone, do you know, is this something that OECD is spending a lot in your view? I mean, you used to run the DAC gym among others, so among other things that you've done, is this something that the OECD should be more involved with in your mind? Well, as you know, it has been for the secretary general of the OECD, is stressing very much, and he's done it from this platform, among other places, as well as the OECD's emphasis on policy coherence, which brings these pieces together. So I think the OECD is giving it more emphasis and we'll see it perhaps as they come out with their new look at international transfers and better ways to count ODA and so forth, which is coming soon. The tax collectors for development, I think, is what they call it, or the full collection. Well, there is that, but there's a lot of other things. There's a new initiative by the Center for Tax and Development, IDS, that has come up with a new tool for measuring, but this is still, I think, a very nascent effort, is to get a better handle on the data and the dissemination of that data. Thank you. I want to hear from Casey Dunning. I think we're only going to have time probably for four, I'm sorry about that, but we'll come over to Casey. Thanks so much, Anne. I'm showing favoritism, because I think the Center for Global Development. Thanks so much for the excellent panel and report. I think my question relates a bit to the very first one that was asked, and I wanted to hear the panel's thoughts on the dirty development word of conditionality, and it seems like there's an expectation when you make investments in increased DRM that the outcomes will go towards social goods and not a huge statue or some such thing. So I wonder to the extent that you're thinking about it in your agencies, and then are you having explicit conversations with these governments before you make certain investments? Thanks. Okay, so I'm going to have Greg go first in terms of answering any and all of those you want to cover. I'm hoping you're also going to cover in particular some of the points that Steve Mosley mentioned, and then I'm going to have Marco after you, and then I'm going to have Bob, and then Catherine. Okay, and I'm going to try to do this concisely. Those were each huge questions, but there's some definite linkages between them, and I think they all go back to this question of democracy and accountability, and I first want to ask Larry what you're drinking right before you go to bed, because I'm having the same nightmare as you, and yeah, okay, maybe we need to change our brand of scotch or something, but no, this is the key issue, and I think it gets to what everybody's raising here, whether it's Steve's question about what citizens are actually demanding, or Casey's question about conditionality, which really gets to the question about what donors are demanding, and how you reconcile those. And that's what keeps me awake at night in this conversation, that we're going to continue to focus too much on our definition of good and accountable governance and fail to take the time and effort to actually listen to what citizens are demanding from their own governments. I actually, I'm maybe personally a late convert on the power of the MDGs, because I think they've done a lot to change the conversation that we have globally, and whereas 15 years ago, governments had different ways of validating their own prestige and validating their existence to their populace, today we hear increasingly that governments are feeling judged, even non-democratic governments are feeling judged by their populace on how well they are delivering development outcomes. Just to take a case in point, Ethiopia is a country that is making huge commitments on its ability to deliver tangible development outcomes to its people. Despite the challenges that exist there with democratic accountability, Rwanda's another one. I would not hold up Rwanda as an example of protection of rights and democratic governments, and yet accountability to citizens for delivering development outcomes is a centerpiece of their development model. So the challenge for us, I think, as donors, as Northern based implementers is how do we, without legitimizing those governments and their style of governance, how do we actually leverage that sense of accountability to citizens in a way that actually helps people get what they need? Ultimately, citizens are not going to rise up and demand better tax collection and better spending integrity. Citizens are gonna rise up and demand that when the government declares that primary schooling is now free, that their kid actually has a seat in that classroom and doesn't get crammed in with 120 other kids. They're gonna demand that when the government says we're going to wipe out malaria in their community, that when they show up to the dispensary for the meds, that the meds are actually there and they haven't been siphoned off elsewhere in the supply chain. So those are the types of things that we're going to be able, I think, to work with more. And I think the big challenge is, especially as we're trying to figure out how we get more resources here in the US government to work on this, that we actually look at the challenge not as building up a better tax collection system, but as that, but building up that tax collection system as simply a waypost on the way to making sure that those meds get delivered, that those textbooks show up, those teachers show up, and that people actually get the types of outcomes they need. That's how we're gonna be able to build this link. Thanks, Dan, and as a partner in an audit firm, we're totally in love with the word accountability and it is a sexy topic to us. And I'm just gonna make some generic comments related to this whole area of accountability, transparency, whatever way you wanna frame it, because I think it touches on a number of the questions that were raised. Much in line with what Greg has just touched on, we view it in a slightly different way. You can tell an auditor or anyone who's gonna look at any aspect of accountability to go and show the results of that review, but it's within a framework. So you've got to define what accountability is first. So there are two elements to this with respect to this discussion. You've got to be accountable for the money you receive and how you use it, but it's also what are you leaving on the table? And that can be both illicit and also, things that you're just not capturing in a legal way. But that framing, that definition of what should be accountable and what you should be transparent against, in my view, and I think this is the point that Greg's making, shouldn't come from us, should come from the governments themselves and the constituents themselves. So how do you promote that awareness, that education for them to define that accountability? The mechanisms are in place, both locally, nationally, internationally with respect to reporting on that accountability, but you've got to define it. Yeah, a number of very good questions. In terms of revenue accountability, people have a right to know that they're gonna pay taxes, it's gonna go to something worthwhile. And the way that we would handle this is we would not go into a country where we didn't have a reasonable expectation that the money wouldn't be spent in an appropriate way. We'd try and implement companion programs to make sure that was the case. And as far as local versus national, yeah, we always talk about the national because that's the easiest place for us to operate. There's a lot of opportunities in terms of local governance that we'd like to take advantage of, particularly in terms of making things more transparent. That's very important at the local level. Larry asked about what keeps me up at night and I sort of referenced it before when Dan asked that 1.5 billion, that's continuing, right? And I said, well, we hope so because evil does not rest. The people who try to take a little bit off the top are gonna be there and they're gonna come back and try harder and harder each year. So it's a continuous battle that you have throughout government in every sector. You always have to be aware and that could blow up easily depending on what situation you're in at. For Ambassador Michaels, yes, there's missing data throughout the developing world. We have tried where we could to help them improve the data but this is a long range goal. This is a big mountain to climb. And last but not least, could we have conditionality for some of these programs? And I say that would be a great idea but a conditionality unfortunately is really hard to enforce. It requires you have a carrot and in most of our programs, we can offer technical assistance and if the technical assistance is not used appropriately, we will stop it. But there is an awful lot we can do otherwise other than try and use moral persuasion or convince them that we won't do other things in the future that might help them and help them do things they might want. So I've been involved in conditionality a number of places where we did have a carrot and I can't say it worked really well there either. So you really have to worry about making sure that the people you start off a project with are committed and that's the most important thing. Thanks Bob. Catherine, I'm gonna give you the last word. Thank you. Thank you very much. Such so many issues and interesting issues so let me just try and address two or three of these on what keeps you up at night. And this is something that sort of maybe that's why that bags under my eyes after 20 years of work on this but very much so how to keep the tax of my reference previously to professionalizing the administrations how to reduce the political interference and make tax administration more of a technical and the customs of technical agencies in the developing world and less political agencies. And for example, you mentioned in your case study of Chile, in Latin America there've been maybe one or two that administrations that have managed to professionalize their administrations and even then there's political influences that go in but Chile and Brazil come to mind. How to set up these administrations so that you're not losing ground every time there's a change of government. And for example, the figure of having a commissioner general with a very clear terms of reference that are sort of reviewed by government more broadly not just the government in turn but that there's some outside agency or maybe accountant general that's sort of ensuring that the qualifications of the management team are the right ones. And also that the term of the leadership team lasts beyond the cycle of the political cycle. These are things that I think are so difficult but definitely for the countries that have managed to address at least in some way these issues and say this is not gonna become a technical more of a technocratic service and not a political agency. It's going to be implementing the tax system. Someone else decides the Ministry of Finance or the political process, what the tax system is going to look like but this is essentially a technical service. And that's sort of one thing that sort of I think keeps all of us up at night who work on this and worried that our efforts and the efforts of the teams at the technical level in the countries that work on this become frustrated themselves. So it's not just us but it's our counterparts in the countries. How to address that? The other which goes a little bit hand in hand with the accountability issue that's been mentioned but I'd like to focus on it in a slightly different way. How are the governments themselves holding the tax administrations accountable for delivering effective services? And here I think there's a great deal of work to be done in the countries that I'm not sure how to do it or whether we're focusing enough and it's as follows. From my own work in Mexico looking at the work of the Auditor General of the Federation and then discussions with the congressional leaders to realize that the quality of the accountability work that was being done that would be similar to a GAO is really far from what it needs to be to really focus on the core technical issues. And that's because again, that's not the degree of professionalization and skills in the country's own accountability agencies is still not there. How do we do that? And also at the political level in the congresses and the parliaments of these countries, how can we build greater skills and greater capacities in the equivalent of a public finance committee or a tax committee? So to broaden the reach of our work on capacity building in the tax area to be on the tax administration to those organizations in government that are also involved with ensuring that the work that is done is as good as possible, that the reforms that are promised are actually delivered. And my last point, because I come from IMF has to do with conditionality. As I mentioned, many IMF programs have conditionality. This has been scaled back quite a bit in the past decade or so. There used to be a lot more conditionality and when color and successive MDs came in, this was brought down, now conditionality is pared down. But the idea that governments or countries that have conditionality in their fund programs that these conditions tend to be implemented quite effectively across the board. And a recent working paper that Sanjeev Gupta and Ernesto Cravelli did of IMF programs and the extent to which tax administration conditionalities or tax policy and administration conditionalities are implemented across fund programs is very interesting. But the message is for countries that have had successive IMF programs and agreements over time, these measures look like in general, they do get implemented to a great degree and that they are having an impact in increasing revenue over time to the tune of two points of GDP. So, and interestingly in terms of the effect of tax policy measures and tax administration measures on this increase, the other finding that I found so interesting is it's sort of half and half because we always ask ourselves, well, how much impact are these tax administration measures going to have and Sanjeev and Ernesto find that it's more or less half and half, which brings us back to the idea that you can't just work on the tax collection or compliance and service. It's really the structure of this tax system along with its administration that has the greatest impact on improving compliance levels and then delivering the resources. So that was the last point I wanted to make. Well, thank you. Please join me in thanking the panel making this conversation very interesting. Thank you very much.