nep-pbe New Economics Papers
on Public Economics
Issue of 2008‒07‒30
four papers chosen by
Oliver Budzinski
Philipps-University of Marburg

  1. Is Fiscal Decentralization Conflict Abating? Routine Violence and District Level Government in Java, Indonesia. By Mansoob Murshed; Zulfan Tadjoeddin
  2. Political institutions and suicide: A regional analysis of Switzerland By Justina AV Fischer; Antonio Rodriguez-Andrés
  3. Who's afraid of an EU tax and why? : revenue system preferences in the European Parliament By Heinemann, Friedrich; Mohl, Philipp; Osterloh, Steffen
  4. A Review of Studies on the Distributional Impact of Consumption Taxes in OECD Countries By Neil Warren

  1. By: Mansoob Murshed (Institute of Social Studies, The Hague); Zulfan Tadjoeddin (Institute of Social Studies, The Hague)
    Abstract: Utilising a newly created data set we examine the relationship between routine/everyday violence and fiscal decentralization in 98 districts of the Indonesian island of Java. By examining possible relationships between fiscal decentralization and routine violence, this paper fills a gap in the literature where the analysis of the relation between fiscal decentralization and violence is relatively scant. Routine violence, which is different from both civil war and ethno-communal conflict, centres around group brawls, popular justice or vigilante violence. Despite the uniform implementation of fiscal decentralization, sub-national entities exhibit varying experiences with decentralization, but a common consequence is the increased size of local government. Fiscal decentralization, and the increased size of local government, can alleviate pent-up frustrations with a centralized state, as local government expenditure is seen to satisfy the needs of communities that people identify with more closely. Our results show that this is indeed the case, but the capacity to do so mainly lies with richer districts.
    Keywords: Asia, Indonesia, routine violence, fiscal decentralization
    JEL: D74 H71 H72
    Date: 2008
  2. By: Justina AV Fischer; Antonio Rodriguez-Andrés
    Abstract: The question to what extent governance structure affects people’s well-being, here reflected in the decision to commit suicide, remains still largely unknown. This paper examines the effects of political institutions and governance structure on suicide using a balanced panel for 26 Swiss states (cantons) over the period 1980–1998. Our results indicate that stronger popular rights and more fiscal decentralization reduce suicide, while more local autonomy increases it. The effects are not strongly gender-specific. However, we find evidence that the effect of direct legislation is partly transmitted through sub-federal budgets, but not through health sector spending exclusively.
    Keywords: Suicide, Direct democracy, Decentralization, Happiness, Well-being
    Date: 2008
  3. By: Heinemann, Friedrich; Mohl, Philipp; Osterloh, Steffen
    Abstract: The EU's revenue system is still typical for an organisation based on international cooperation and stands in contrast to the Union's far advanced legislative and political role. This contrast feeds the debate on granting the EU an autonomous tax source. Our contribution explores the factors which shape the acceptance of the EU tax option among European policy makers. We make use of a unique database : A survey among Members of the European Parliament (MEP) which resulted in a response of some 150 of the representatives. Our results confirm an important role for party ideology and individual characteristics but they also demonstrate that country-specific factors are important to understand the support for an EU tax. In the light of our findings the status quo bias in the EU's revenue system can be attributed to the persistent importance of national interests with respect to fiscal burden sharing and tax policy.
    Keywords: European Parliament, EU tax, revenue system
    JEL: D78 H29 H87
    Date: 2008
  4. By: Neil Warren
    Abstract: Consumption taxes are only rarely assessed for their impact on the economic well-being of individuals. This paper reviews various studies on this issue. It first describes the large differences in the size and structure of these taxes among OECD countries, and then reviews the types of assumptions that are typically made when estimating the redistributive impact of these taxes. Based on this review, the paper advocates the wider adoption of the methodology that is currently adopted by government statisticians in Australia, Canada and the United Kingdom – based on input-output tables and on the modelling of a large part of the consumption taxes levied on various types of final expenditures and production inputs. The paper argues that, beyond methodological differences, all studies agree that consumption taxes have a significant regressive impact on the distribution of household disposable income. Illustrative simulations – based on applying the detailed findings on the incidence of consumption tax in one country (Australia) to the tax structure and income distribution of other OECD countries suggests that omission of consumption taxes affects estimates of the overall size of the redistribution achieved through the tax system and of how this differ across countries and evolves over time. <BR>Les impôts à la consommation sont rarement évalués pour leur incidence sur le bien-être économique des individus. Ce document se penche sur cette question. D’abord, il présente les grandes différences dans la taille et la structure de ces impôts dans les pays de l’OCDE. Puis, il examine les hypothèses qui sont typiquement faites pour estimer leur impact redistributif. Sur la base de cet examen, le document prône l’adoption plus large de la méthodologie actuellement adoptée par la Statistique publique en Australie, au Canada et au Royaume-Uni – une méthodologie basée sur des tableaux entrées-sorties et qui considère la plus grande partie des impôts à la consommation prélevés tant sur les dépenses finales que sur les facteurs de production. Le document montre qu’au-delà des différences méthodologiques, toutes les études conviennent que les impôts sur la consommation ont une incidence régressive significative sur la distribution du revenu disponible des ménages. Des simulations indicatives – basées sur l’application des résultats sur l’incidence des impôts à la consommation dans un pays (l’Australie) sur la structure des impôts et la distribution du revenu des autres pays de l’OCDE – montrent que d’ignorer ces impôts affecte toutes mesures de redistribution opérée par le système fiscal et que ces effets varient d’un pays à l’autre et dans le temps.
    JEL: D31 H23
    Date: 2008–06–26

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