Beruflich Dokumente
Kultur Dokumente
Secrecy
Rivals cant credibly claim to offer more:
if
they dont know what members of the winning coalition are getting
if they dont know where the money is and how much there is
!
Keeps
Members
Leaders
Sales
Reform
It
Transparency
Helps
Taxpayers
!
!
3 Constraints on Taxation?
Constraints on Taxation
1. They diminish how hard people work
2. Some of the burden will fall on essentials
3. It is costly both in terms of expertise and
resources
Mmmmm . . . . . pie!
districts.
The
However,
districts.
Hence,
urban
renewal projects,
sewage treatment plants,
land reclamation.
Consumers
Who
All
tax-payers.
Notice that if there are n districts of equal size, the district where
the project is located pays only 1/n of the cost.
If
If
Getting It Passed
How
Promise
Result:
Confiscation
loyal!
Tax Collectors
Democracies
Cant
Autocracies
Less
transparent
Higher rates lead citizens to hide their earnings (black markets)
If it costs $38 to collect taxes from an individual (flat rate), the
higher the GDP p/c, tax collection costs a lower amount of
overall revenues.
Quiz!
Whats
a monopsony?
Give
Government Monopsonies
Market Price
Gov't Price
80
60
40
20
0
1974
1984
1994
2004
2014
Government Monopsonies
Market Price
Gov't Price
80
60
40
20
0
1974
1984
1994
2004
2014
Government Monopsonies
Market Price
Gov't Price
80
60
40
20
0
1974
1984
1994
2004
2014
Paid
Pay
Corruption
!
Let
Reduces
The
During
When
The
But
The hangover
In
The
Initially,
But
By
Extraction
economic growth
More prone to civil wars
More autocratic
Borrowing
Debt Forgiveness
Frees up the government to start borrowing again
Worst
in autocracies
Further Reading
Weingast, B., K. Shepsle, C. Johnsen. 1981. "The Political Economy
of Benefits and Costs: A Neoclassical Approach to Distributive
Politics. Journal of Political Economy 89: 642-664.
!