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on Public Finance |
| By: | Alexander Knobel (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Gaidar Institute for Economic Policy); Ilya Sokolov (Gaidar Institute for Economic Policy) |
| Abstract: | This paper presents an analysis of the quality of VAT administration in OECD countries and Russia. Econometric analysis of the factors which influence the quality of VAT administration, demonstrate a positive effect of the level of institutional development on the efficiency of tax collection. However this tendency takes place only when there are no additional tax exemptions being implemented alongside the economic development where ex-emptions, in addition to causing a direct loss, complicate the taxation system and lower the quality of its administration |
| Keywords: | administration efficiency, optimal taxation, VAT. |
| JEL: | C23 C51 C53 H21 H23 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0050&r=pub |
| By: | Yutao Han (CREA, University of Luxembourg); Patrice Pieretti (CREA, University of Luxembourg); Benteng Zou (CREA, University of Luxembourg) |
| Abstract: | In our paper we show that when countries compete in taxes and infrastructures, coordination through a uniform tax rate or a minimum rate does not necessarily create the welfare effects observed under pure tax competition. The divergence is even worse when the competing jurisdictions differ in the quality of their institutions. If tax revenue is used to gauge the desirability of coordination, our model shows that imposing a uniform tax rate is Pareto-inferior to the non cooperative equilibrium when countries compete in taxes and infrastructures. This result is completely reversed with pure tax competition if countries are not too uneven in size. If a minimum tax rate lying between those resulting from the non-cooperative equilibrium is set, the low tax country will never be better off. Finally the paper shows that the potential social welfare gains from tax harmonization crucially depend on how heterogeneous the competing countries are. |
| Keywords: | Tax competition, infrastructures, tax coordination, tax revenue, social welfare |
| JEL: | H21 H87 H73 F21 C72 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:luc:wpaper:13-02&r=pub |
| By: | Andrés González; Martha Rosalba López Piñeros; Norberto Rodríguez; Santiago Téllez |
| Abstract: | In this paper we develop a dynamic stochastic general equilibrium fiscal model for the Colombian economy. The model has three main components: the existence of non-Ricardian households, price and wage rigidities, and a fiscal authority that finances government spending partly with public debt. The model is calibrated to capture the empirical evidence on the macroeconomic effects of government spending and it is used to study the effect of an oil price shock under different fiscal policy rules. Our results show that fiscal multipliers in Colombia are positive in a way consistent with the evidence. Our analysis also shows that a structural fiscal rule delivers a better outcome in terms of macroeconomic volatility relative to a balanced budget rule or a countercyclical fiscal rule. |
| Date: | 2013–02–17 |
| URL: | http://d.repec.org/n?u=RePEc:col:000094:010483&r=pub |
| By: | Holger Strulik; Timo Trimborn |
| Abstract: | Most of the discussion about fiscal stimulus focuses on the multiplier of government spending on impact. In this paper we shift the focus to the multiplier at the end, i.e. to the period in which a deficit spending program terminates. We show that recent time series analyses as well as economic models of different schools of thought predict that the multiplier turns negative before spending expires. This means that aggregate output at the time of expiry of fiscal stimulus is predicted to be lower than it could be without deficit spending. We set up a simple model that explains this phenomenon. Using phase diagram analysis we prove that the aggregate capital stock at the time of expiry of fiscal stimulus is lower than it would be without the deficit spending program. This fact explains why aggregate output is below its laissez faire level as well. We then calibrate an extended version of the model for the US and demonstrate how fiscal stimulus slows down recovery from a recession in the medium-run. |
| Keywords: | fiscal stimulus; government spending; output multiplier; economic recovery |
| JEL: | E60 H30 H50 O40 |
| Date: | 2013–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:got:cegedp:150&r=pub |
| By: | Danny Cassimon (University of Antwerp); Marin Ferry (LEDa, UMR DIAL-Paris-Dauphine); Marc Raffinot (LEDa, UMR DIAL-Paris-Dauphine); Bjorn Van Campenhout (International Food Policy Research Institute (IFPRI)) |
| Abstract: | (english) After two debt relief initiatives launched in 1996 (the Heavily Indebted Poor Countries, HIPC Initiative) and in 1999 (The enhanced HIPC initiative), the G7 decided to go further by cancelling the remaining multilateral debt for these HIPC countries through the Multilateral Debt Relief Initiative (MDRI, 2005). A few papers tried to assess the desired fiscal response effects of those initiatives. This paper uses an extended dataset and alternative econometric techniques in order to tackle methodological issues as endogeneity and fixed effects. We found that debt relief and especially the enhanced HIPC initiative have had a positive impact on the total domestic revenue and the public investment (as percentages of the GDP). Thanks to our large observation span, we also observed that the MDRI led to a significant additional improvement of the level of public investment and domestic revenues ratio, although these effects are smaller than the HIPCs ones. _________________________________ (français) Après deux initiatives de réduction de dette (PPTE I fin 1996 et PPTE II en 1999), le G7 décida d’annuler la totalité de la dette multilatérale (Initiative d’Annulation de la Dette Multilatérale, IADM en 2005). Quelques travaux ont essayé d’évaluer l’impact de ces mesures sur les finances publiques des pays bénéficiaires. Ce travail utilise une base de données plus étendue et des méthodes économétriques alternatives pour tenir compte de l’endogénéïté et des effets fixes. Nous trouvons que les réductions de dette (en particulier l’initiative PPTE II) ont eu un impact positif sur la pression fiscale et sur les investissements publics (en pourcentage du PIB). Grâce à l’extension de la période d’étude, nous observons également que l’IADM a un effet similaire, quoique moins persistent. |
| Keywords: | HIPC, MDRI, Debt relief, Fiscal revenue, Public investment, Fiscal response. |
| JEL: | H20 H54 H63 O55 F34 |
| Date: | 2013–01 |
| URL: | http://d.repec.org/n?u=RePEc:dia:wpaper:dt201301&r=pub |
| By: | Meijdam, A.C.; Ponds, E.H.M. (Tilburg University, Center for Economic Research) |
| Abstract: | Abstract This paper explores the optimal degree of funding of public sector pension plans. It is assumed that a benevolent social planner decides on the contribution of current taxpayers to the funding of public sector pensions next period, weighing the interests of current and future tax payers. Two elements play a role in the optimal funding decision: the optimal-portfolio choice (i.e. the tradeoff between the expected excess return and the additional risk of funding vis-Ã -vis pay-as-you-go) and intergenerational redistribution (i.e. whether the current generation of tax payers is willing and capable to prefund the pension obligations of current public sector workers or shifts the burden to future generations via a pay-as-you-go scheme). The optimal degree of funding appears to vary over time, depending not only on the relative weight given to the current generation, risk aversion, and the distribution of financial risk and human capital risk, but also on the actual state of the economy, i.e. on wage income, funding in the past and the realization of the excess return on this funding. |
| Keywords: | public sector pension plans;funding;implicit debt;portfolio approach |
| JEL: | H55 H75 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:dgr:kubcen:2013011&r=pub |
| By: | Sergey Drobyshevsky (Gaidar Institute for Economic Policy); Sergey Sinelnikov-Murylev (Gaidar Institute for Economic Policy); Ilya Sokolov (Gaidar Institute for Economic Policy) |
| Abstract: | This paper deals with 2008-2009 crisis which marked a new stage of Russia’s budgetary policy. Although the budget situation in Russia is presently much better than in the majority of the developed countries, reservation of high dependence on oil proceeds, observed trends in in the structure of expenditure obligations indicate the preservation of high risks of an unbalanced budget in long term perspective. Provision of budgetary and macroeconomic balance require adoption of urgent measures both in the sphere of tax policy and budget outlays. |
| Keywords: | budget policy, financial stability, tax policy, fiscal policy, national budget. |
| JEL: | E62 E52 E58 G01 H61 H68 |
| Date: | 2013 |
| URL: | http://d.repec.org/n?u=RePEc:gai:wpaper:0051&r=pub |