Richard Musgrave in Colombia: The Art of Tax Reform in a Developing Country

CHOPE Working Paper No. 2022-06

53 Pages Posted: 26 May 2022 Last revised: 11 Oct 2022

See all articles by Maxime Desmarais-Tremblay

Maxime Desmarais-Tremblay

Goldsmiths, University of London; Centre Walras-Pareto, Université de Lausanne

Date Written: October 11, 2022

Abstract

Richard A. Musgrave (1910-2007) is remembered today as the American economist who established modern foundations for public finance theory in the middle of the twentieth century. His work as a tax expert in developing countries has received little historical scrutiny. Musgrave was the chief economist of the 1949 World Bank mission to Colombia chaired by Lauchlin Currie. Twenty years later, he himself chaired an important fiscal reform mission in Colombia, the report of which served as a roadmap for the 1974 Colombian tax reform. Drawing from archival material and published sources, this paper reconstructs the intellectual baggage that Musgrave brought on his travels to Colombia. It situates his policy recommendations in the context of the Cold War developmentalist age and the rise of American expertise in Latin America. Musgrave’s worldview was consistent over the period. The paper shows how Musgrave employed normative principles of tax equity and positive knowledge about the economy to make the case for progressive reforms to the tax structure. In the long run, the legacy of the Musgrave mission is less visible in the Colombian tax code, but it still shapes the language of tax reform in Colombia and elsewhere.

Keywords: tax reform, Colombia, horizontal equity, Richard Musgrave, history of economic thought

JEL Classification: B20, B41, H20, O10, O23, O54

Suggested Citation

Desmarais-Tremblay, Maxime, Richard Musgrave in Colombia: The Art of Tax Reform in a Developing Country (October 11, 2022). CHOPE Working Paper No. 2022-06, Available at SSRN: https://ssrn.com/abstract=4112321 or http://dx.doi.org/10.2139/ssrn.4112321

Maxime Desmarais-Tremblay (Contact Author)

Goldsmiths, University of London ( email )

Lewisham Way
New Cross
London, SE14 6NW
United Kingdom

Centre Walras-Pareto, Université de Lausanne ( email )

Quartier Chambronne
Lausanne, Vaud CH-1015
Switzerland

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