sources, bureaucratic capture, corruption and accountability mechanisms, they capture the hu­man rights principles of accountability and transparency in practice in allocating resources within sectors. b) Evaluating resource generation In addition to understanding how governments allocate funds, another component of this step considers how these resources are generated. The objective here is to assess whether sufficient revenue is being raised and to evaluate the human rights implications that arise from how revenue is being raised from different sources. Major sources of government revenue are taxation, borrowing and, in some cases, international development assistance, including official development assistance (ODA). A starting point is to look at the size of the government’s budget vis-à-vis the overall size of the economy (often depicted as government spending as a percentage of GDP). Seeing how this indicator compares over time or to similar countries can help judge how effective the state has been in harnessing available resources in the country. However, to analyze why more revenue is not being raised, it is necessary to look beyond the budget, to evaluate relevant fiscal and macroeconomic policies to determine their compliance with human rights principles. Tax policy, for example, can be assessed against the human rights principles of non-discrimination and progressive realization. Taxation is a major source of revenue for states. It is also the principle policy tool at states’ disposal for lifting people out of poverty and reducing inequality. However, many governments face serious challenges due to weak and under-resourced revenue authorities, large informal sectors, pressure to offer overly-generous tax breaks, and tax avoidance and evasion. Determining whether a tax system is progressive, flat or regressive by using incidence analysis, for example, can uncover whether it is effectively discriminating against the poor and other vulnerable groups. Common examples of regressive taxes include indirect taxes imposed on the consumption of essential goods and services, such as the Value-Added Tax (VAT) which typically comprise a larger share of the income of poorer households compared to wealthier households. Determining how much tax revenue the state collects, for example by looking at the ratio of tax revenue to GDP over time, and establishing the amount of tax revenue foregone in tax concessions, exemptions, evasion, holidays, and privileges benefiting certain sectors can indicate whether the state is making progress towards addressing the constraints that deprive it of resources for ESC rights fulfillment. Countries that generate significant resources through development assistance may face different issues. In some cases, donors attach policy conditionalities to their aid, such as trade liberalization, and an increasing role for the private sector in service provisions, or ceilings on public sector pay that negatively affect human rights. In other cases, donors tie aid to the purchase of imports from the donor countries that cost more than goods and services available locally. In addition, ODA is not always channeled through a country’s treasury, making it more difficult to track, manage and coordinate resources sustainably, at times creating a parallel set of development priorities and a group of actors with little oversight or accountability. Furthermore, analysis of whether a state is spending and generating funds to the maximum of its available resources to meet its human rights obligations can go beyond evaluating fiscal policy alone. Further investigation can examine many other variables that influence the pool of resources that a state makes available for the fulfillment of economic and social rights outside of budget and tax policy analysis. These factors might include debt and deficit financing, international development assistance, government borrowing, monetary policy and financial regulation. Assessing compliance with the obligation to fulfill economic, social and cultural rights 25