Program Overview

  Inclusive growth continues to remain a challenge for South Asian economies. Experts now agree that the missing link between growth and inclusivity is labor market outcomes that generate well-paying and productive jobs. Most non-agricultural employment in South Asia is concentrated in small enterprises characterized by very low productivity and wages. Research indicates that small enterprise development and employment generation is strongly linked to tax policy. First, tax exemptions and concessions are largely skewed to favor large enterprises. Second, small enterprise development is affected by taxes such as the Value Added Tax (VAT). Third, small enterprise development is affected by weak local property taxation. The gender dimension of small enterprise development in South Asia has been ignored in policy and research. These problems need to be researched through an integrated framework from the national and international perspectives. This research would fill research gaps, inform policy, and provide opportunities for shared learning outcomes at the regional level.
 
  The proposed themes for this research were developed from discussions initiated at a Workshop held 8-9 August, 2010, inviting 15 leading think-tanks and research institutes across South Asia. These institutes have proposed to conduct collaborative, time-bound research on these themes focusing on South Asian experiences. This research will produce country studies on each theme which will then be processed at the regional level for meta-analysis. These studies will provide insights for more informed policies on inclusion and impacts on enterprise development, productive employment and inclusive growth at the national level, and promote transfers of learning experiences at the regional level. A Technical Advisory Board has been constituted to provide peer review services for research outputs and facilitate policy engagement. The Governance Institutes Network International (GINI) will provide Secretariat services to this project. These themes constitute the research agenda for Year 1, after which a new Workplan will be developed and approved, prioritizing research on new policy challenges across South Asia.

  What is needed now is a collaborative effort by the leading think-tanks of the region, to conduct empirical research on tax policy and its relationship to enterprise development and inclusive growth, at the national and regional levels. This research would fill research gaps, inform policy, and provide opportunities for shared learning outcomes at the regional level.