Social Security Policy Support (SSPS) Programme

An initiative of the Cabinet Division and the General Economics Division (GED), Bangladesh Planning Commission, Government of Bangladesh
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Fiscal Responsibility and the Fragile Social Contract in Bangladesh

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This episode explores the critical fiscal challenges facing Bangladesh, where a persistently low tax-to-GDP ratio—among the lowest in South Asia—undermines the state’s capacity to deliver essential public services. Drawing from Rousseau’s theory of the social contract, the discussion situates taxation as a civic responsibility that underpins democratic governance and equitable development. Despite commendable economic growth, Bangladesh’s fiscal architecture suffers from inefficiencies, low compliance, and public mistrust, further exacerbated by an expansive informal economy. The episode highlights the need for comprehensive reform: broadening the tax base, modernizing the National Board of Revenue, improving transparency, and incentivizing voluntary compliance. From a development partner’s perspective, this episode underscores the urgency of restoring public trust and reinforcing the reciprocal obligations between citizens and the state. As Bangladesh aspires to graduate from LDC status and achieve Vision 2041, strengthening fiscal responsibility is essential to a sustainable, rights-based, and inclusive development pathway.

By- Arju Afrin Kathy

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SSPS Programme

An initiative of the Cabinet Division and the General Economics Division (GED), Planning Commission, Government of Bangladesh.

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