nep-pbe New Economics Papers
on Public Economics
Issue of 2009‒10‒03
eight papers chosen by
Oliver Budzinski
Philipps-University of Marburg

  1. How Much Did the 2009 Fiscal Stimulus Boost Spending? Evidence from a Household Survey By Andrew Leigh
  2. The effects of political reservations for women on local governance and rural service provision: By Raabe, Katharina; Sekher, Madhushree; Birner, Regina
  3. ZEW Corporate Taxation Microsimulation Model (ZEW TaxCoMM) By Reister, Timo; Spengel, Christoph; Finke, Katharina; Heckemeyer, Jost H.
  4. Auditor Expertise: Evidence from the Public Sector By Mark Schelker
  5. Introducing taxation policy of profit for companies in Romania and other european union member states. By Chirculescu, Felicia Maria; Dobrota, Gabriela
  6. Tax compliance costs: a business administration perspective By Eichfelder, Sebastian; Schorn, Michael
  7. How labour ended up taxing itself: the political consequences of a century of self-transformation of the German welfare state By Kemmerling, Achim
  8. Making Markets for Merit Goods: The Political Economy of Antiretrovirals By Ethan B. Kapstein; Josh Busby

  1. By: Andrew Leigh
    Abstract: Using survey evidence, I estimate the impact of a $12 billion package of household payments delivered in Australia between March and May 2009. Forty percent of households who said that they received the payment reported having spent it. This is approximately twice the spending rate that has been recorded in surveys assessing the 2001 and 2008 tax rebates in the United States. Using an approach for converting spending rates into an aggregate marginal propensity to consume (MPC), this is consistent with an aggregate MPC of 0.41-0.42. Since this estimate is based only on first-quarter spending, it may be an underestimate of the longer-run impact of the package on consumer expenditure.
    JEL: H24 H31
    Date: 2009–09
  2. By: Raabe, Katharina; Sekher, Madhushree; Birner, Regina
    Abstract: "In 1993, India introduced quota-based political reservations for women in rural areas with the objective to promote gender equality in human development by making rural service provision and local governance inclusive and responsive to the needs of women. Recent evidence shows that reservation policies for women (1) stimulate the political participation of women in rural areas, (2) shift rural service provision to public goods that reflect gender preferences, and (3) improve the access to and the quality of public services. Despite the suggested positive effects of women's reservation policies on service provision and local governance, the gender bias in human development is still pronounced. This casts doubt on the effectiveness of reservation policies as an instrument for making rural service provision and local governance more gender equitable and raises questions about the nature and direction of the major constraints. This paper aims to qualify and quantify the role of political reservation policies for women as a determinant of rural service provision and local governance and seeks to identify the social, economic, and institutional factors that constrain effective local governance and rural service provision beyond the women's reservation effect. Our empirical sample consists of 80 Gram Panchayats (GP) and 966 households in 12 districts in Karnataka in 2006. In contrast to the main existing literature, the empirical evidence from (non-)linear probability models lends weak support to the existence of gender effects of reservation policies on local governance and rural service provision. The local governance and service delivery outcomes are predominantly determined by social, economic, and institutional factors that are unrelated to women's reservation requirements. For example, (1) individual characteristics such as literacy, household institutional and political linkages, or the household location in the GP and (2) GP-specific factors such as the degree of community involvement in service provision and the fiscal devolution of activities are more likely to have a significant effect on service provision and governance than reservation policies for women. These results suggest that women's reservation policies per se are insufficient means for making rural service provision and local governance more inclusive and gender equitable. In addition, it appears that gender-integrated policy approaches that are targeted at both women and men are needed." from authors' abstract
    Keywords: Gender, Decentralization, Local governance, Rural service provision, Affirmative action, Governance, Women,
    Date: 2009
  3. By: Reister, Timo; Spengel, Christoph; Finke, Katharina; Heckemeyer, Jost H.
    Abstract: Current political discussions in Germany and other European countries illustrate the importance accorded to revenue and distribution effects of tax reforms. Whereas widely recognized concepts of effective tax measures can provide important insights into the incentives of taxation they do not allow robust revenue estimations or distribution analyses. Hence there is need to supplement existing quantitative tax models by approaches apt for these issues of policy analysis. Against this background, this paper puts forward a corporate microsimulation model allowing an ex-ante evaluation of tax reforms with regard to distributional consequences and revenue effects. Central feature of the model is the processing of financial statements included in the DAFNE data base of the Bureau van Dijk. The firm-level data is supplemented by survey data on tax accounting practices. The focus of the paper is on the documentation of the model set-up. Its application will be addressed in future publications.
    Keywords: Microsimulation Model,Corporate Taxation,Policy Analysis,Firm-Level Data
    JEL: C15 D30 H25 H32 K34
    Date: 2009
  4. By: Mark Schelker
    Abstract: Public Audit Offices are fundamental institutions to supervise government agents. Without accurate information principals would find it hard to make adequate decisions. Since agents face strong incentives to misreport, competent audits of financial information is crucial. This paper is the first attempt to study the relationship between auditor expertise and fiscal performance. More competent auditors are more effective supervisors; they reduce the leeway of agents to misreport and improve fiscal outcomes. The empirical results support this hypothesis. I found that States requiring the auditor to hold a professional degree feature significantly lower expenditures and debts and higher credit ratings.
    Keywords: public auditor; tenure length; term limit; governance
    JEL: H11 D70 H10
    Date: 2009–08
  5. By: Chirculescu, Felicia Maria; Dobrota, Gabriela
    Abstract: Taking into account the EU enlargement process the problem of establishing the various levels of tax rates of interest in the context of the policy runs the national tax policy states with influence over capital flows. Quantifying corporate tax rates of companies are the most visible attribute of the structure of company taxation in an economy, while being only one factor among many determining the tax, resulting in a significant economic impact in a state.
    Keywords: profit tax; taxation levels; tax harmonization
    JEL: H7 H2
    Date: 2009
  6. By: Eichfelder, Sebastian; Schorn, Michael
    Abstract: The paper analyses the relationship of tax compliance costs and business strategy. Due to instruments, like information technology, simplified cash accounting or outsourcing compliance activities to tax advisers, private businesses have a set of strategies to optimize their tax compliance cost burden. Under the assumption of rational choice a private business should choose a cost-optimal administration strategy. In spite of that we find empirical evidence for small German businesses using only insufficiently the support of external tax advisers. Therefore, a considerable number of small businesses in Germany could reduce their compliance cost burden by a higher degree of outsourcing tax processes. In contrast, we find no significant evidence for a cost reduction by an electronic data interchange with the tax and social insurance authorities or by a simplified cash accounting method for tax purposes.
    Keywords: Tax complexity,tax compliance costs,bureaucracy costs,tax administration,administration strategy,business strategy,outsourcing,contracting out,e-filing,electronic data interchange, cash accounting
    JEL: H25 H26 L23 L24
    Date: 2009
  7. By: Kemmerling, Achim
    Abstract: This paper investigates the long-term evolution of the tax system in Germany to explain why the political left has increasingly expanded taxation to its own clientele. The paper contrasts the second half of the 19th with the second half of the 20th century to show that some of the underlying parameters of tax systems have changed over time. In particular these are the existence of a mature welfare state and the significance of real wages as a tax base. Moreover, the paper selectively uses comparisons with the United Kingdom (UK) to show that where these conditions are absent the structure of the tax system is very different and taxes labour much less than in Germany. In this sense the British selftransformation of the welfare state has had very different political consequences than the German ; Das Diskussionspapier untersucht die langfristige Entwicklung des Steuersystems in Deutschland und erklärt, warum die politische Linke sich in zunehmendem Maße selbst besteuert. Dazu werden die zweiten Hälften des 19. und 20. Jahrhunderts miteinander verglichen, um zu zeigen, dass die zugrunde liegenden Rahmenbedingungen des Steuersystems sich verändert haben. Zu letzteren zählen insbesondere der Wohlfahrtsstaat und die Reallöhne als Steuerbasis. Zudem werden Vergleiche mit der Entwicklung im Vereinigten Königreich gezogen. Dadurch wird deutlich, dass, wo diese Rahmenbedingungen sich anders entwickelt haben, sich auch das Steuersystem anders entwickelte, und dass vor allem Arbeitnehmer weniger besteuert werden. In diesem Sinne hatte die Selbsttransformation des britischen Wohlfahrtsstaates ganz andere politische Konsequenzen als die deutsche.
    Date: 2009
  8. By: Ethan B. Kapstein; Josh Busby
    Abstract: This paper examines the role of policy entrepreneurs and global activists in shaping the international market for antiretroviral drugs to combat HIV/AIDS. When ARVs first came on the market in the 1990s they were exceedingly expensive; the cost of treatment was upwards of $10,000 per year. These drugs were thus accessible only to those patients who had high incomes. But in 2006, the “international community,” meeting at a United Nations General Assembly Special Session (UNGASS), made an astonishing pledge to those who were infected with HIV. It proclaimed that there should be universal access to ARV treatment. This UNGASS, following up on an earlier historic UN special session devoted entirely to AIDS in 2001, marked the first time in history that the international community pledged itself to chronic care for the ill, which in this case includes the approximately 30 million people around the world estimated to be HIV positive. How do we explain the transformation of ARVs from private goods, which only a few could afford, into merit goods that were (at least declaratively) to be made available to everyone? In other words, how does a norm of “universal access to treatment”—that no person should be denied these life-extending drugs—become the ethical basis for global public policy with respect to pharmaceutical allocation? What are the lessons of the ARV story for other global issues? These are the primary questions we explore in this paper. Briefly, we argue that the policy entrepreneurs and activists who promoted the creation of a universal access to treatment regime—of the transformation of ARVs into global merit goods—relied on a combination of moral arguments and ideas with favorable material circumstances. From the ethical perspective, the task of these entrepreneurs was to convince the “international community” that access to ARVs was a “human right,” or conversely to convince decision-makers that it was morally wrong to allocate these life-enhancing drugs solely on the basis of ability to pay. But from a material standpoint, these arguments were greatly facilitated by the lowering prices of ARVs caused by a combination of differential pricing (that is, lower prices for drugs in the developing world than in the advanced welfare states) and competition from generics producers, coupled with increases in foreign aid spending devoted to HIV/AIDS and other diseases.
    Keywords: HIV/AIDS; ARVs; antiretrovirals; activists; policy entrepreneurs; merit goods; international community; global public health; global public policy; foreign aid
    Date: 2009–08

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