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Question:
Suppose you were appointed economic advisor to a less-developed nation in Africa. The nation is seeking to encourage capital formation and wants to increase the rate of savings of its own residents and encourage foreigners to invest in their nation. What role would you assign to property taxes in this nation to achieve its objectives?
In addition, choose and discuss two other "features" of an economic system that you would recommend this country to implement. Explain and justify each choice.
Include two to three citations.

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Solution Summary

Suppose you were appointed economic advisor to a less-developed nation in Africa. The nation is seeking to encourage capital formation and wants to increase the rate of savings of its own residents and encourage foreigners to invest in their nation. What role would you assign to property taxes in this nation to achieve its objectives?

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To achieve the objective of increased foreign investment in the nation, government can eliminate or reduce property taxes. This will encourage foreign investors to invest in the property market in the country. Property tax related incentives can not only encourage foreign investors to invest in the nation, but will also motivate domestic investors to save and invest in real estate.

The nation can also encourage foreign investment in the country by removing restrictions on investments in ...

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