Measuring tax policy over time

Introduction The goal of this chapter is to examine the methods used in the literature to measure tax policy over time – information that was vital for determining the methodology I used in this book, which will be defined in the next chapter. This process begins by defining the concept of tax policy and stipulating that the focus of this work is on discretionary tax policy as opposed to non-discretionary tax policy. I will then present the two main methodologies used in the literature to measure tax policy: those based on proxies and those based on narrative approaches. I will finish this chapter by presenting some conclusions on the suitability of using these approaches in Latin American countries.