In many developing countries, tax policy is often driven more by pragmatism rather than the pursuit of optimal outcomes. Barriers such as informality, low tax capacity, political roadblocks, and limited data analytics often result in inefficient and inequitable tax structures that persist over time.
In this Policy Research Talk delivered on April 7, 2025, World Bank Economist Dario Tortarolo drew on recent research on both national and subnational taxes—including value added taxes (VAT), personal income taxes, wealth taxes, business income taxes, and property taxes— to show how new data-driven approaches are reshaping how governments design and evaluate tax systems in real time, enabling policymakers to move beyond educated guesses toward informed, evidence-based decisions.