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on Public Finance |
| By: | Stanley L. Winer (Department of Economics, Carleton University); George Tridimas (School of Economics and Politics, University of Ulster); Walter Hettich |
| Abstract: | This paper develops and expanded framework for social planning in which coercion stemming from the provision of public goods is explicitly acknowledged. Key issues concern the precise definition of coercion, its difference from redistribtion, and its incorporation into social welfare optimization. The paper examines the implications for optimal policy, showing how the Samuelson condition, rules for optimal linear income taxation and commodity taxation, and for the marginal cost of public funds must be modified. In addition, the trade-off between social welface and coercion is mapped under specific conditions and the implications of this trade-off for normative policy choice are considered. |
| JEL: | D70 H10 H20 H21 |
| Date: | 2007–01–27 |
| URL: | http://d.repec.org/n?u=RePEc:car:carecp:07-03&r=pub |
| By: | Eduardo Engel; Ronald Fischer; Alexander Galetovic |
| Abstract: | Public-private partnerships (PPPs) cannot be justified because they free public funds. When PPPs are desirable because the private sector is more efficient, the contract that optimally trades demand risk, user-fee distortions and the opportunity cost of public funds is characterized by a minimum revenue guarantee and a cap on the firm's revenues. Yet income guarantees and revenue sharing arrangements observed in practice differ fundamentally from those suggested by the optimal contract. The optimal contract can be implemented via a competitive auction with realistic informational requirements; and risk allocation under the optimal contract suggests that PPPs are closer to public provision than to privatization. |
| JEL: | H21 H54 L51 R42 |
| Date: | 2007–07 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:13284&r=pub |
| By: | Castro, VÃÂÃÂÃÂÃÂtor (University of Warwick, University of Coimbra and NIPE) |
| Abstract: | Several studies have identified the factors that cause public deficits in industrial democracies. They consider that economic, political and institutional factors play an important role in the understanding of those deficits. However, the study of the determinants of excessive deficits remains practically unexplored. Since excessive deficits can have large negative spillover effects when countries are forming a monetary union without a centralised budget ÃÂâÃÂÃÂÃÂàas it is the case for a group of European countries ÃÂâÃÂÃÂÃÂàthis paper tries to explore that gap in the literature by identifying the main causes of excessive deficits and the ways of avoiding them. Binary choice models are estimated over a panel of 15 European Union countries for the period 1970-2006, where an excessive deficit is defined as a deficit higher than 3% of GDP. Results show that a weak fiscal stance, low economic growth, the timing of parliamentary elections and majority left-wing governments are the main causes of excessive deficits in the EU countries. Moreover, the institutional constraints imposed after Maastricht over the EU countriesÃÂâÃÂÃÂÃÂàfiscal policy have succeeded in reducing the probability of excessive deficits in Europe, especially in small countries. Therefore, this study concludes that supranational fiscal constraints, national efforts to reduce public debts, growth promoting policies and mechanisms to avoid political opportunism and partisan effects are essential factors for an EU country to avoid excessive deficits. Finally, the results presented in this paper raise the idea that a good strategy for the EU countries to avoid excessive deficits caused by the opportunistic behaviour of their policymakers would be to schedule elections for the beginning or the end of the year. |
| Keywords: | Excessive public deficits ; European Union ; Political opportunism ; Binary choice models |
| JEL: | E62 H6 O52 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:warwec:805&r=pub |
| By: | Oestreicher, Andreas; Spengel, Christoph |
| Abstract: | The aim of this paper is twofold. First, we want to examine whether and if so, to what extent, the concept of International Financial Reporting Standards (IFRS) meets the requirements of a Common Consolidated Corporate Tax Base (CCCTB) for the EU-wide activities of multinationals as proposed by the European Commission. Second, we estimate the consequences on the effective levels of company tax burdens in selected EU member states if IFRS are considered as a tool for defining the tax base. Our analysis reveals that IFRS could provide elements of a common and harmonised European tax base in certain areas. In particular, tax accounting still has to follow the realisation principle. Therefore, IFRS ÃÂâÃÂÃÂÃÂÃÂfair value-accountingÃÂâÃÂÃÂÃÂàcannot be adopted for tax purposes. A transition to tax accounting on the basis of IFRS has only minor effects on the effective tax burdens of companies. |
| Keywords: | International Company Taxation, Effective Tax Burden, Tax Accounting |
| JEL: | H21 H25 |
| Date: | 2007 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:5694&r=pub |