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on Informal and Underground Economics |
| By: | Alvaro Forteza (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República); Cecilia Noboa (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República) |
| Abstract: | We present a formal model in which individuals want the government to tolerate tax evasion because, in the context of limited state capacity, evasion provides insurance. Preferred tolerance to tax evasion increases with income, because government programs are redistributive. We take the model to the data using the World Values Survey. We show that both in the model and in the WVS data justification of tax evasion is increasing in individuals’ income, presents an inverted-U shape in perceived risk and is decreasing in institutional quality. Our analysis suggests that strong tax enforcement might not be popular among many citizens, particularly so in weak institutional environments. |
| Keywords: | Informality, tax morale, tolerance to evasion. |
| JEL: | H20 H26 O17 |
| Date: | 2015–11 |
| URL: | http://d.repec.org/n?u=RePEc:ude:wpaper:1015&r=iue |
| By: | Sokolovskyi, Dmytro; Sokolovska, Olena |
| Abstract: | This paper aims to propose the approach to classify the industries in terms of easiness of tax evasion. Basing on assumptions of taxpayer’s behavior, our results allow defining the type of dependence of real tax rates on their nominal ones. We find that the graph, describing the taxpayer’s behavior, has two key points: maximum – the optimal tax rate (if this rate increase, the real tax revenues fall), and also the point of simple reproduction (after achieving this level, firms stop to pay taxes at all with appropriate shifting into informal sector or closing down). I.e. two key levels of tax burden: «optimal» and «zero» can be defined. The values of those parameters for taxpayers operating in different groups of industries were calculated. |
| Keywords: | tax burden, economic behavior, tax evasion, game theory |
| JEL: | C72 G38 H26 |
| Date: | 2016–05–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:71110&r=iue |
| By: | Kochanova,Anna; Hasnain,Zahid; Larson,Bradley Robert |
| Abstract: | Using a cross-country data set on e-government systems, this paper analyzes whether e-filing of taxes and e-procurement adoption improves the capacity of governments to raise and spend resources through the lowering of tax compliance costs, improvement of public procurement competitiveness, and reduction of corruption. The paper finds that information and communications technology can help improve government capacity, but the impact of e-government varies by type of government activity and is stronger in more developed countries. Implementation of e-filing systems reduces tax compliance costs as measured by the number of tax payments, time required to prepare and pay taxes, likelihood and frequency of firms being visited by a tax official, perception of tax administration as an obstacle, and incidence of bribery. The effects of e-procurement are weaker, with the number of firms securing or attempting to secure a government contract increasing with e-procurement implementation only in countries with higher levels of development and better quality institutions. The paper finds no systematic relationship between e-procurement and bureaucratic corruption. |
| Keywords: | Debt Markets,E-Business,Taxation&Subsidies,E-Government |
| Date: | 2016–04–28 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:7657&r=iue |
| By: | Dolado, Juan J. (European University Institute); Lalé, Etienne (University of Bristol); Siassi, Nawid (University of Konstanz) |
| Abstract: | This paper analyses the optimal design of a single open-ended contract (SOEC) and studies the political economy of moving towards such a SOEC in a labour market where employment protection is highly discontinuous. We develop a computationally tractable approach to compare two economic environments: one with a large employment protection gap after a short tenure, and another one with a SOEC featuring a smooth tenure profile. For illustrative purposes, we specialise the discussion of such choices to Spain, a country often considered as an epitome of a labour market with dual employment protection. We show that a SOEC has the potential of bringing substantial improvements in equilibrium allocations and welfare. We provide estimates for the eligibility rule and tenure profile of the optimal SOEC, defined as the contract maximising the steady-state lifetime utility of new labour-market entrants. Finally, we use the model to identify winners and losers among younger and older workers in the transitional path of such a reform, and evaluate its political support. |
| Keywords: | single contract, employment protection, dualism, labour market reform |
| JEL: | H29 J33 J65 |
| Date: | 2016–05 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp9953&r=iue |
| By: | JULIA PASSABOM ARAUJO; MAURO RODRIGUES |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:040&r=iue |
| By: | Ricker-Gilbert, Jacob; Mason, Nicole; Chamberlin, Jordan |
| Abstract: | Informal land markets, particularly land rental markets, are emerging rapidly in many parts of sub-Saharan Africa (SSA). Land rental markets have the potential to contribute to structural transformation if, for example, such markets facilitate the transfer of land from less productive to more productive farming households. Although there is a growing literature on the determinants of smallholder farm households’ decisions to participate in land rental markets, relatively little is known about the factors driving land rental prices in SSA. This study aims to fill that gap using panel data from Malawi to estimate the effects of various plot-level characteristics and economic variables on plot-level land rental prices. Of particular interest is the effect of Malawi’s Farm Input Subsidy Program (FISP) on land rental prices, as evidence from the US suggests that part of the value of agricultural subsidies is often capitalized in land rental prices. Our results suggest that FISP has no substantive effect on land rental prices, perhaps because FISP’s effects on maize productivity have been modest. Expected crop prices, soil quality, and market access are more important determinants of land rental prices in Malawi; increases in these variables are associated with higher average rental prices, ceteris paribus. |
| Keywords: | land rental markets, rental prices, structural transformation, input subsidy programs, Malawi, sub-Saharan Africa, Agricultural and Food Policy, Consumer/Household Economics, Crop Production/Industries, Food Security and Poverty, International Development, Land Economics/Use, D63, O12, Q15, |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:ags:aaea16:235819&r=iue |
| By: | DENISIO AUGUSTO LIBERATO DELFINO; FERNANDO DE HOLANDA BARBOSA FILHO; ROGÉRIO PORTO |
| Date: | 2016 |
| URL: | http://d.repec.org/n?u=RePEc:anp:en2015:231&r=iue |