Developing countries must also find creative ways to increase government revenue. Even the poorest nations today fund the large majority of essential services like health care and education. But many don't have the expertise and resources to raise more money through broad-based and effective tax collection.
One effort backed by the U.S., the U.K., Germany and more than 30 other countries will double the technical support to poor countries, helping them increase tax collection and domestic revenues. This minimal cost could significantly strengthen the efficiency, effectiveness and transparency of tax systems in poor countries.
It can be done. Rwanda--through a combination of legislation, stronger administration and more effective taxpayer registration and compliance--increased revenues by about 50% between 2001 and 2013, the Organization for Economic Cooperation and Development found.