A complex paper-based city tax collection system made Rio de Janeiro a difficult environment for business and a source of lost revenue when Eduardo Paes became mayor in 2009. Elected on a promise to set the city’s fiscal house in order, Paes planned to implement an electronic invoicing system based on similar programs piloted in other Brazilian cities. A recent constitutional amendment required all levels of Brazil’s federal system of government to ease the burdens of the country’s tax system. Paes reasoned that the potential efficiency gain from a new system was among the few routes available for increasing revenue. His team had to overcome significant challenges to implement the new system and ensure participation by consumers in monitoring tax payments. Strong political and technical leadership, collaboration, and good design helped to successfully implement the new system, called Nota Carioca. This case study offers other governments at the national or subnational levels useful lessons in improving revenue administration and implementing reforms that feature information technology, stakeholder communication, and partnerships.
 
Neil Fowler drafted this case study based on interviews conducted in Rio de Janeiro, Brazil, in March 2014. The case was prepared by ISS in partnership with the World Bank as part of the Bank’s Science of Delivery initiative. Case published July 2014.

In 1996, Mongolia’s newly elected government, led by a group of market-oriented politicians, decided to reform civil service on the New Zealand New Public Management model, which required managers to sign contracts promising results in exchange for freedom to spend their budgets as they chose. The reforms were intended to modernize a civil service that, while legally changed since democratization in 1990, retained many of the characteristics, and staff, of the previous Soviet-modeled system. Reformers confronted a lack of robust accountability procedures, salary arrears and a lack of central control over local expenditures. The Democratic Coalition government, led by an economic team strongly committed to market-oriented reforms, settled on the contract-based New Public Management model as a way of preserving agency-level decentralization while making agencies’ managers directly accountable to the national government. When enacted, the system met with difficulty at every stage: in specifying outputs for agencies and individuals, in measuring performance, and in rewarding good performance. By 2009, thirteen years after the reforms started, officials reported that the contracts remained largely a formality.

David Hausman wrote this case study based on interviews conducted in Ulaanbaatar, Mongolia, in December 2009. 

Associated Interview(s):  Mendsaikhany Enkhsaikhan