|
on Public Economics |
| By: | Argentino Pessoa (Faculdade de Economia da Universidade do Porto, Portugal) |
| Abstract: | The debate on new public management, together with the shortage of public funds, has had a considerable impact on public administration. Accordingly, many governments have searched positive impacts on the efficiency, equity and quality provision of public services through increasing competition and active participation of the private sector, considering outsourcing as the appropriate instrument to attain such endeavor. However, private involvement in public services provision is controversial. While, on the one hand it is touted as a way to increase efficiency and accountability by turning over choices to individuals in the market place, on the other hand, some argue that it has the potential to produce considerable fraud and corruption if managerial control by the public sector is weak. So, given this context, we aim to assess the private involvement in public services in efficiency terms, putting aside ideological considerations. So, after the introduction, we present a definition of public goods and we characterize their different types, with particular emphasis on “impure” public goods. Section 3, focuses on market failures together with equity considerations as the main reasons that configure the role of the public sector in providing impure public goods, as well as on the possibility of government failures. Section 4 deals with the benefits and costs of outsourcing in the public sector. Section 5 describes the most frequent forms of private sector involvement in the provision of impure public goods, as well as the advantages and disadvantages of the different options. Section 6 carries out some comments on the need for regulation. Finally, section 7 concludes. |
| Keywords: | Contracting out, impure public goods, market/government failures, private sector involvement, public sector |
| JEL: | H42 H50 I18 I28 L33 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:por:fepwps:329&r=pbe |
| By: | Hansjörg Blöchliger; Oliver Petzold |
| Abstract: | This paper analyses trends in and driving forces of the revenue composition of sub-central governments (SCG). Between 1995 and 2005 the share of SCG in total government spending increased from 31 to 33%, while the SCG tax share remained stable at around 17%, increasing SCG’s dependence on intergovernmental grants. While equal access to public services is the most common justification for such grants, the grant systems of most countries are much larger than required by equalization. Moreover, rather than smoothing out SCG revenue fluctuations over the cycle, grants often tend to exacerbate them. Finally, there is some evidence that grants reduce SCG tax raising effort, inflate SCG spending and increase SCG deficits and debt. The economic crisis will both sharply reduce SCG’s own tax revenues and – via budget constraints at the central level – increase pressure on the grant system. The crisis could hence help rethink the SCG revenue mix, their tax structure and the size and design of intergovernmental transfers.<P>Impôts ou transferts : quels revenus pour les administrations infranationales ?<BR>Ce document analyse les tendances et les déterminants de la composition des revenus des administrations infra-nationales (AI). Entre 1995 et 2005, la part des dépenses des AI dans les dépenses publiques totales a augmenté de 31 à 33%, alors que leur participation aux recettes fiscales restait stable autour de 17%, accentuant de ce fait la dépendance des AI envers les transferts intergouvernementaux. Bien que l’égalité d’accès aux services publics soit la raison la plus souvent invoquée pour justifier ces transferts, les systèmes de transferts sont en réalité souvent bien plus importants que ceux qu’impliquerait la simple péréquation. Par ailleurs, les transferts ont tendance à amplifier plutôt qu’à réduire les fluctuations de revenus au cours du cycle. Finalement, il semblerait que les transferts réduisent l’effort fiscal des AI tout en augmentant leurs dépenses et donc leurs déficits et leur dette. La crise économique en cours à la fois va réduire fortement les impôts propres des AI et – suite aux contraintes budgétaires au niveau central – augmenter la pression sur le système des transferts. La crise pourrait donc inciter à repenser la composition des revenues des AI, la structure de leurs impôts et la taille et le design des transferts intergouvernementaux. |
| Keywords: | fiscal federalism, intergovernmental grants, fédéralisme fiscal, transferts intergouvernementaux, impôts locaux, local tax system |
| JEL: | H42 H50 H77 |
| Date: | 2009–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:706-en&r=pbe |
| By: | Felix Bierbrauer (Max Planck Institut Bonn) |
| Abstract: | The literature on public goods has shown that efficient outcomes are impossible if participation constraints have to be respected. This paper addresses the question whether they should be imposed. It asks under what conditions efficiency considerations justify that individuals are forced to pay for public goods that they do not value. It is shown that par- ticipation constraints are desirable if public goods are provided by a malevolent Leviathan. By contrast, with a Pigouvian planner, efficiency can be achieved. Finally, the paper studies the delegation of public goods provision to a profit-maximizing firm. This also makes participation constraints desirable. |
| Keywords: | Public goods, Mechanism Design, Incomplete Contracts, Regulation |
| JEL: | D02 D82 H41 L51 |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:trf:wpaper:265&r=pbe |
| By: | Brad Badertscher (University of Notre Dame); Sharon P. Katz (Harvard Business School, Accounting and Management Unit); Sonja Olhoft Rego (University of Iowa) |
| Abstract: | This study investigates how private equity ownership affects corporate tax avoidance. Private equity (PE) firms have been accused of aggressively managing their own tax liabilities and those of their portfolio firms. We investigate the latter assertion based on a sample of private firms for which there is financial statement data available. We first document that firms significantly alter their tax avoidance patterns in anticipation of 'going public' and 'going private' transactions. We then find that majority PE-backed private firms engage in less book-tax nonconforming tax planning than public years; nonetheless, they exhibit substantially lower marginal tax rates. We attribute these results to the larger debt tax shields of majority-owned PE-backed firms, which reduce their need for nonconforming (i.e., more aggressive) tax strategies. Lastly, we examine how different private ownership structures (e.g., majority PE ownership vs. management-owned) affect tax planning at private firms. Our results indicate that majority-owned PE-backed firms engage in more book-tax conforming and nonconforming tax planning than other private firms. We attribute these results to the managerial sophistication and resources available to majority-owned PE-backed firms. |
| Keywords: | Private equity, ownership structure, tax avoidance, tax planning, tax aggressiveness, book-tax differences. |
| Date: | 2009–07 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:10-004&r=pbe |
| By: | Ratbek Dzhumashev; Emin Gahramanov |
| Abstract: | In this paper we develop a stochastic endogenous growth model augmented with income tax evasion. Our model avoids some existing discrepancies between empirical evidence and theoretical predictions of traditional tax evasion models. Further, we show that: i) productive government expenditures play an important role in affecting economy's tax evasion rate; ii) the average marginal income tax rate in Australia come close to the optimal; and iii) the phenomenon of tax evasion is not an excuse for a productive government to advocate an excessive income taxation. |
| Keywords: | Tax evasion; Economic growth; Public services |
| JEL: | H26 D91 O41 |
| Date: | 2009–04–15 |
| URL: | http://d.repec.org/n?u=RePEc:dkn:econwp:eco_2009_05&r=pbe |
| By: | Coolidge, Jacqueline; Ilic, Domagoj |
| Abstract: | This paper is based on large-scale surveys of formal and informal small businesses in South Africa, including questions about their experiences and perceptions about tax compliance, tax morale, and related variables. The survey findings suggest that formalization is more likely to take place in urban areas, involving relatively larger firms, and those who already use proper bookkeeping. Informal firms who said they were likely to register for tax in the near future were more likely than other informal firms to report higher satisfaction with government services, and to believe most businesses pay their taxes. The most-cited advantages of being registered for tax included better access to government services, better access to financing, and better opportunities for growth. |
| Keywords: | Taxation&Subsidies,Debt Markets,Emerging Markets,Tax Law,Fiscal Adjustment |
| Date: | 2009–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4992&r=pbe |
| By: | Estache, Antonio; Iimi, Atsushi; Ruzzier, Christian |
| Abstract: | Infrastructure has particular challenges in public procurement, because it is highly complex and customized and often requires economic, political and social considerations from a long time horizon. To deliver public infrastructure services to citizens or taxpayers, there are a series of decisions that governments have to make. The paper provides a minimum package of important economic theories that could guide governments to wise decision-making at each stage. Theory suggests that in general it would be a good option to contract out infrastructure to the private sector under high-powered incentive mechanisms, such as fixed-price contracts. However, this holds under certain conditions. Theory also shows that ownership should be aligned with the ultimate responsibility for or objective of infrastructure provision. Public and private ownership have different advantages and can deal with different problems. It is also shown that it would be a better option to integrate more than one public task (for example, investment and operation) into the same ownership, whether public or private, if they exhibit positive externalities. |
| Keywords: | Public Sector Economics&Finance,Debt Markets,Infrastructure Economics,Contract Law,Transport Economics Policy&Planning |
| Date: | 2009–07–01 |
| URL: | http://d.repec.org/n?u=RePEc:wbk:wbrwps:4994&r=pbe |
| By: | Thiess Buettner |
| Abstract: | The paper briefly surveys available data sources and discusses future developments relevant for empirical public finance in Germany. It starts from the notion that public finance deals with decisions of various agents, not only governments, but also private households and firms. Therefore, empirical research needs different types of data. Government decisions are to some extent captured in terms of the budgetary statistics, even though these statistics have shortcomings with regard to the quality of public service provisions and the revenue instruments. To study the decisions of the other agents individual level data is required. While some progress has been made, recently, the combination of various datasets at the individual level is a key priority. |
| Keywords: | Empirical Research; Public Finance; Budgetary Statistics; Revenue Statistics; Micro-level Data; Taxpayer Data |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:rsw:rswwps:rswwps32&r=pbe |
| By: | Sebastian G. Kessing |
| Abstract: | This study analyzes the interaction between distorted election choices and the architecture of government with a focus on the implications for the accountability of politicians. Contrasting centralized with decentralized political systems, it is shown that centralization is likely to result in higher accountability if election choices are subject to small random distortions. Furthermore, equity and efficiency arguments for uniform policies in centralized systems are derived as these are likely to result in the better overall performance of politicians and in more equal performance across regions. |
| Keywords: | accountability, federalism, decentralization, retrospective voting |
| Date: | 2009 |
| URL: | http://d.repec.org/n?u=RePEc:sie:siegen:130-09&r=pbe |
| By: | Steffen Bach; Hansjörg Blöchliger; Dominik Wallau |
| Abstract: | This pilot study presents indicators that assess sub-central government (SCG) spending power by policy area. Traditional indicators – such as the share of SCG in total government spending – are often misleading as they underestimate the impact of central government regulation on sub-central spending patterns. In order to gauge true spending power, a set of institutional indicators is established, based on a detailed assessment of institutional, regulatory and administrative control central government exerts over various SCG policy areas. Results tend to confirm the limited discretion of SCGs over their own budget. Education in particular – the main SCG budget item in most countries – is strongly shaped by central government regulation. Federal countries tend to grant more spending power to SCGs than unitary countries. With a few amendments, the framework of this study could be applied to all OECD countries, although it is advisable to restrict the analysis to the main sub-central spending areas.<P>L’autonomie budgétaire des administrations infranationales : un avant-projet<BR>Cet avant-projet présente des indicateurs pour évaluer l’autonomie budgétaire des administrations infranationales (AI). Les indicateurs traditionnels – tels que la part des dépenses des AI dans les dépenses totales – sont souvent trompeurs car ils sous-estiment l’influence de la réglementation mise en place par le gouvernement central sur la ventilation des dépenses infra-nationales. Afin d’estimer la véritable autonomie des AI, un ensemble d’indicateurs a été développé sur la base d’une analyse détaillée du pouvoir institutionnel, réglementaire et administratif que le gouvernement central exerce sur les politiques menées par les AI. Les résultats tendent à confirmer que les AI disposent d’une autonomie limitée sur leurs propres dépenses. L’éducation en particulier – souvent le poste budgétaire le plus important des AI – est un domaine fortement modelé par le gouvernement central. Les pays fédéraux tendent à garantir une autonomie budgétaire plus élevée à leurs AI que les pays unitaires. En l’adaptant légèrement, le cadre de cette étude pourrait être appliqué à tous les pays membres de l’OCDE, bien qu’il soit recommandé de limiter l’analyse aux domaines principaux de l’action publique. |
| Keywords: | local government, fiscal federalism, fédéralisme fiscal, collectivités territoriales, spending autonomy, autonomie budgétaire |
| JEL: | H10 H72 H77 |
| Date: | 2009–07–03 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:705-en&r=pbe |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper provides a self-contained introduction to the economic modelling of growth and reviews the theoretical evidence on the extent of the link between taxation and growth.<P>La croissance économique et le rôle de la fiscalité - Théorie<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude fournit une introduction autonome à la modélisation économique de la croissance et résume les résultats empiriques traitant du lien entre la fiscalité et la croissance. |
| Keywords: | taxation, fiscalité, croissance économique, croissance, public policy, politique publique, economic growth |
| JEL: | H2 H3 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:713-en&r=pbe |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper surveys the empirical analysis of disaggregate data on growth. The aim is to identify how economic policy can affect the choices that have been identified as influences upon the rate of growth.<P>La croissance économique et le rôle de la fiscalité - Données désagrégées<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude résume les recherches qui ont porté sur l’analyse empirique des données désagrégées. Le but de cette étude est d’identifier comment la politique économique peut influencer les choix qui ont eux-mêmes un impact sur le taux de croissance. |
| Keywords: | taxation, fiscalité, economic growth, croissance économique, public policy, politique publique, disaggregate data, données désagrégées |
| JEL: | C01 H2 H3 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:715-en&r=pbe |
| By: | Gareth D. Myles |
| Abstract: | Economic growth is the basis of increased prosperity. This makes the attainment of growth a key objective for governments across the world. The rate of growth can be affected by policy choices through the effect that taxation has upon economic decisions and through productive public expenditures. This paper surveys research that has undertaken empirical analysis of aggregate data. The focus of the survey is the identification of the factors that determine the rate of growth.<P>La croissance économique et le rôle de la fiscalité – Données agrégées<BR>La croissance économique est au fondement du progrès de la prospérité. Ceci fait de la croissance un objectif majeur pour les gouvernements du monde entier. Le taux de croissance peut être influencé par des choix de politique économique relatifs à la fiscalité, laquelle a un effet sur les décisions économiques des agents et est liée aux dépenses publiques productives. Cette étude résume les recherches qui ont porté sur l’analyse empirique des données agrégées. Le but de cette étude est d’identifier les facteurs qui ont une influence sur le taux de croissance. |
| Keywords: | taxation, fiscalité, economic growth, croissance économique, public policy, politique publique, aggregate data, données agrégées |
| JEL: | C01 H H2 O4 |
| Date: | 2009–07–15 |
| URL: | http://d.repec.org/n?u=RePEc:oec:ecoaaa:714-en&r=pbe |