nep-pbe New Economics Papers
on Public Economics
Issue of 2009‒11‒21
nine papers chosen by
Oliver Budzinski
Philipps-University of Marburg

  1. Financial autonomy of Italian municipalities. Some aspects By Simonetta Botarelli
  2. Tax evasion and widening the tax base in Uganda By Sennoga, Edward; Matovu, John M.; Twimukye, Evarist
  3. Cost and Time Overruns in Infrastructure Projects: Extent, Causes and Remedies By Ram Singh
  4. Gender and taxation: analysis of personal income tax (PIT) By Bategeka, Lawrence; Guloba, Madina; Kiiza, Julius
  5. Infrastructures and economic performance: a critical comparison across four approaches By Torrisi, Gianpiero
  6. The lasting lack of direct universal suffrage for French metropolitan areas : a shackle that must be rapidly cancelled or a great asset that should be absolutely protected ? (In French) By Olivier THOMAS (LEREPS-GRES)
  7. Fiscal Policy during the current Crisis By Bunea-Bontas, Cristina Aurora; Petre, Mihaela Cosmina
  8. Imapct of Tax Reforms on Household Welfare By Matovu, John; Twimukye, Evarist; Nabiddo, Winnie; Guloba, Madina
  9. What fiscal policy is effective at zero interest rates? By Gauti B. Eggertsson

  1. By: Simonetta Botarelli
    Abstract: Management choices pertaining to local governments’ functions and services arise even from their autonomy degree; such a degree is also due to the process of constitutional revision and reform. Over recent years administrative decentralization caused a growth of local governments’ (in particular municipalities) financial autonomy through an initial process of fiscal federalism. Anyway, as it happens for many fiscal and financial issues, the provision for decentralized functions had to face a remarkable difference between the original plan and the actual reform. This paper will focus on the chosen path, by trying to outline different periods and those choices which characterized them, as well as local governments’ behaviour aimed to a higher responsibilization as for own choices and expenditure policies with respect to citizens and electors’ evaluation.
    Keywords: Local Government, Intergovernmental Relations, State and Local Taxation.
    JEL: H7 H72 H77
    Date: 2009–06
  2. By: Sennoga, Edward; Matovu, John M.; Twimukye, Evarist
    Abstract: Uganda still lags behind in its tax collections at the domestic level. For most of the commodities the tax collection effort is not more than 5 percent relative to the statutory rate of 18 percent. This results into a situation where the government has to rely a lot on foreign financing. From the analysis, there is a lot of improvement where URA can be able to increase its tax effort. this could be achieved by targeting commodities that are under-taxed and excluding food items for equity purposes. Increasing domestic collection would also result into less over reliance on taxing a few commodities especially fuel which is interlinked with a lot of other sectors and could indeed harm growth in the long-run. We also find that the tax effort on imports is sufficient. However, import duties on fuel remain very high and this could be a symptom of the poor domestic tax collection.
    Keywords: Taxation, Tax base, Domestic taxes, import duty, Sennoga, Twimukye, Matovu, EPRC, Agribusiness, Agricultural and Food Policy, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Demand and Price Analysis, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Public Economics,
    Date: 2009–05
  3. By: Ram Singh
    Abstract: Various issues related to delays and cost overruns in publically funded infrastructure projects are investigated. The study is based on, by far, the largest data-set of 850 projects across seventeen infrastructure sectors. The focus is on the causal factors behind time and cost overruns. [CDE WP No. 181].
    Keywords: time, sectors, India, economic, political, public goods, privatization, supply, servicesDelays, Cost Overruns, Time Overruns, Infrastructure, Projects, Causes, Contractual Failures, Organizational Failures, Institutional Failures
    Date: 2009
  4. By: Bategeka, Lawrence; Guloba, Madina; Kiiza, Julius
    Abstract: the paper examines the gender dimensions of personal income tax (PIT) in Uganda with an eye on the possible gender biases that may be embedded in the tax system. It further addresses the issues of Uganda achievement of substantive gender equality rather than formal equality as regards the impact of taxes from a gender perspective. This is in line with Convention on the elimination of all forms of discrimination against all people as if they are the same and synonymous with equality of opportunity... we find that PIT paid by different household earning types increases gender inequality. We also find that some tax systems only worsens gender gaps and hardly is a useful tool that could be used to close the gender gaps. This paper proposes how PIT could be reformed with a view to using taxation as a tool for the realization of substantive gender equality.
    Keywords: Gender equality, CEDAW, Taxation, Income tax, Kiiza, Bategeka, Guloba, Economic policy research center, Community/Rural/Urban Development, Consumer/Household Economics, Demand and Price Analysis, Financial Economics, Institutional and Behavioral Economics,
    Date: 2009–04
  5. By: Torrisi, Gianpiero
    Abstract: The paper reviews studies analysing the relationship between infrastructures and economic performance. Four different approaches are separately considered along an ideal path from theory-based to data-oriented models: the production function approach, the cost function approach, growth-models, and vector autoregression models. The review shows that, even with different shades and points of caution, the general idea that infrastructure has an economic enhancing effect appears to be quite robust across studies belonging to different methodological approaches.
    Keywords: economic development; growth; public expenditure; public infrastructure
    JEL: H54 O11 H72
    Date: 2009–11
  6. By: Olivier THOMAS (LEREPS-GRES)
    Abstract: It is a long time since the problem of the lack of direct universal suffrage for the French metropolitan areas with own taxes (MAOT) has been pointed out. Nevertheless, nothing has ever been done to change this current situation, in spite of a wide agreement in favor of direct universal suffrage for French MAOT. This paper intends to understand the reasons of such a paradox. As a starting point, the arguments in favor of more democracy for MAOT, thanks to direct elections, have been underlined. Then, as these arguments are supposed to be relevant, the alternative “goods reasons” contended by national and local elected actors (mayors, senators, …), implicitly claiming for status quo, have been detailed: the will to preserve the fragile existence of MAOT, to preserve municipal boundaries as the best place for local democracy, as well as to save municipal mandates and to evade the law about plurality of mandates
    Keywords: local democracy – direct universal suffrage – metropolitan areas with own taxes – plurality of mandates – mayor
    JEL: H30 H73 R51
    Date: 2009
  7. By: Bunea-Bontas, Cristina Aurora; Petre, Mihaela Cosmina
    Abstract: Fiscal policy is an important government tool for managing the economy, having the ability to affect the total amount of output produced - GDP. Changes in the level and composition of government spending, taxation or other instruments of fiscal policy have impact on aggregate demand, the pattern of resource allocation, and the distribution of income. The article shows the mechanisms through which fiscal policy stabilizes the business cycle, and the specific requirements for fiscal policy during recession; the practical problems that may occur in implementing an effective fiscal policy are emphasized. Regarding the circumstances of the current financial and economic crises, the revival of the fiscal policy as a macroeconomic policy faces high expectations as to what it can accomplish. The paper highlights the composition of fiscal stimulus package, and reviews the specific fiscal stimulus plans adopted so far by different countries and their objectives. The final section contains an overview of the Romanian government response to the current crises, regarding fiscal policy. The conclusion is that Romania has conducted an inconsistent and ineffective fiscal policy, which has contributed to macro-economic and fiscal imbalances and to an increased fiscal pressure on business. Therefore, a medium-term fiscal framework has to be implemented, in order to ensure effectiveness and fiscal sustainability.
    Keywords: fiscal policy; automatic stabilizers; discretionary fiscal policy; fiscal stimulus; government spending; taxation
    JEL: E62 E65 E63
    Date: 2009–11–13
  8. By: Matovu, John; Twimukye, Evarist; Nabiddo, Winnie; Guloba, Madina
    Abstract: The Uganda government has since 1987 initiated a sequence of tax reforms to address the fiscal challenges facing the country. This paper uses a Computable General Equilibrium (CGE) model to analyze the welfare effects of tax reforms on households and the impact of these challenges on production and firm activities. The findings are consistent with previous studies which found that the introduction of VAT was indeed a progressive policy reform. Zero rating all food items and agricultural products mainly benefit the low income households whose consumption basket is mainly food items. In a quest for further sources of revenue by overtaxing the rich, this could generate further revenues albeit lower savings and investments by this group. Finally, over-reliance on excise duties especially on petroleum and alcohol drinks affects the transportation sectors which are also used by the poor. In our results we find that taxation of petrol and rising excise duties indeed is a regressive policy stance.
    Keywords: Computable General Equilibrium (CGE), Twimukye, Nabiddo, Taxation, Tax base, Agribusiness, Agricultural and Food Policy, Agricultural Finance, Community/Rural/Urban Development, Consumer/Household Economics, Crop Production/Industries, Farm Management, Food Consumption/Nutrition/Food Safety, Food Security and Poverty, Livestock Production/Industries,
    Date: 2009–05
  9. By: Gauti B. Eggertsson
    Abstract: Tax cuts can deepen a recession if the short-term nominal interest rate is zero, according to a standard New Keynesian business cycle model. An example of a contractionary tax cut is a reduction in taxes on wages. This tax cut deepens a recession because it increases deflationary pressures. Another example is a cut in capital taxes. This tax cut deepens a recession because it encourages people to save instead of spend at a time when more spending is needed. Fiscal policies aimed directly at stimulating aggregate demand work better. These policies include 1) a temporary increase in government spending; and 2) tax cuts aimed directly at stimulating aggregate demand rather than aggregate supply, such as an investment tax credit or a cut in sales taxes. The results are specific to an environment in which the interest rate is close to zero, as observed in large parts of the world today.
    Keywords: Fiscal policy ; Interest rates ; Taxation ; Government spending policy
    Date: 2009

This nep-pbe issue is ©2009 by Oliver Budzinski. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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