Vianney DEQUIEDT
* Professor, Université Clermont Auvergne, CNRS, IRD, CERDI; Scientific Director, FERDI, Clermont-Ferrand. Contact: vianney.dequiedt@uca.fr.
Grégoire ROTA-GRAZIOSI
*** Professor, Université Clermont Auvergne, CNRS, IRD, CERDI; Co-Head of the taxation programme, FERDI, Clermont-Ferrand.
Audrey-Anne de UBEDA
** Head of Programme Coordination, FERDI, Clermont-Ferrand.
Financing global public goods with the proceeds of earmarked taxes is an idea that has been regularly discussed and implemented in France after the 2004 Landau report through the solidarity tax on airline tickets and the tax on financial transactions. In this article, we propose an evaluation grid for such a financing mechanism inspired by the theory of mechanism design. We examine its properties in terms of efficiency and equity, facilitation of commitment, coordination of actors, and transparency and control. We use this framework to highlight the strengths and weaknesses of two practical cases: the Solidarity Fund for Development and the International Oil Pollution Compensation Funds, both of which are funded by earmarked taxation. Our analysis shows that the precise modalities of implementation of the earmarked tax are important for judging the relevance of this financing mechanism.
In his manifesto, Dr Jean Kaseya, who has been heading Africa CDC, the public health agency of the African Union, since 17 April 2023, wants to introduce a pan-African tax on airline tickets to finance the agency1. Looking beyond Africa, public health, climate change mitigation, the production of scientific knowledge and the smooth operation of international financial and trading systems are examples of global public goods that require funding. The purpose of this article is to study the properties of a mechanism to finance global public goods through earmarked taxes, and then to detail two case studies illustrating the range of possible institutional choices, their strengths, and their limitations. In so doing, the aim is to highlight the significance of precise arrangements for implementing this type of financing mechanism.Global…
