Sunday, June 03, 2007

The G8 & Third World Development

The Sunday Times (3 June 2007) reports of demonstrations in London and Rostock, just before the 2007 G8 summit, about its failure to keep its 2005 promises on world poverty. But how successful will the plans be even if carried out fully? What all such plans for aid should be aiming for ultimately is to help the assisted nations to become self-supporting through their own development. For this to become a reality a huge infrastructure cost is needed for features like roads, docks, airports which facilitate the citizens to run their businesses.

The book The Free Lunch – Fairness with Freedom reminds that every such improvement raises the value of land nearby. It also shows that the most efficient and fairest way to fund these public investments is to charge all land owners an annual tax or levy on their land's value. This is known as land value tax or location benefit levy. Such a tax is relatively simple to raise and impossible to avoid, which should make it especially attractive to less developed countries which have no history of complex state bureaucracy such as we have in the more developed world.

The book suggests that a priority for aid should be for help in setting up land registration schemes.There is expertise available from the UK through on land registration and in Australia for this and also in raising land value tax (click on Land Tax Brochure) where the taxing of land has been used for many decades.

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