measuring trade strategy in the presence of non tradeables theory and some evidence for the caribbean this article models trade policies in the presence of non tradeables and investigates trade strategy interventions and outcomes where the price of non tradeables endogenously adjusts to trade interventions trade regime bias and neutrality issues are examined within a three sector open economy model the theoretical framework is operationalised using empirical evidence for trinidad and barbados the robustness of partial equilibrium measures of protection for classifying trade strategies is challenged and evidence on alternative general equilibrium or true measures of protection is reported true or revealed trade strategies are shown to differ from those apparently intended by policy makers

the impact of fiscal policy and deregulation on shadow economies in transition countries the case of ukraine a model of ukrainian shadow economy moneydemand is estimated that includes newregulatory burden tax complexity andsoft budget constraint variables thismodel is analyzed to determine the causesand dynamics of the ukrainian shadoweconomy and to assess the effectiveness ofstate measures undertaken to reduce itssize the direct tax burden thebroadly defined regulatory burden thecomplexity of the tax system andsoft budget constraints for enterprises are found tobe important causes of unofficial activity the main explanatory factors forthe estimated decline of the shadow economyin recent years are explained and it is argued that theevidence has implications beyond the caseof ukraine

natural disaster impacts and fiscal decentralization in recent years many developing countries have sought to implement more decentralized governmental systems despite efforts toward fiscal federalism assessment of decentralization activity has been hampered by lack of consistent cross country measures of effectiveness since governments play a central role in the management of catastrophic events disaster impact data provide an opportunity to evaluate whether government structure is important in limiting disaster losses we use cross country data over the 1970 2005 period to estimate the relationship between decentralization and disaster casualties countries with more decentralized governments experience fewer disaster induced fatalities jel h73 q54

corruption s direct effects on per capita income growth a meta analysis corruption is a symptom of weak institutional quality and could have potentially adverse effects on economic growth however heterogeneity in reported findings makes it difficult to synthesize the evidence base with a view to test competing hypotheses and or support evidence based policy and practice to address this issue we have extracted 327 estimates of corruption s direct effect on per capita gdp growth from 29 primary studies following a peer reviewed and pre published systematic review protocol precision effect and funnel asymmetry tests indicate that corruption has a negative effect on per capita gdp growth after controlling for publication selection bias and within study dependence however multivariate meta regression analysis results indicate that the overall effect is not robust to inclusion of moderating variables through a general to specific procedure for model specification we report that the marginal effect of corruption on per capita gdp growth is more adverse when the primary study estimates relate to long run growth are based on low income country data only and extracted from journal papers the effect is less adverse in studies that use the international country risk guide corruption perceptions index and in those reporting estimates from two stage least squares estimations

designing vat systems some efficiency considerations this paper undertakes a cross country analysis of the determinants of vat compliance using data from a sample of 17 oecd countries for 1987 an index of compliance is constructed and regressed against variables which represent characteristics of the countries and their vat rates it is found that a a higher vat rate is associated with lower compliance and this tradeoff limits the revenue maximizing vat rate to under 25 b compliance is substantially lower with multiple vat rates and c an extra dollar spent on administration raises revenue by 12 and longer experience with administering a vat also raises compliance several oecd countries are ranged along a frontier collecting about 8 of gdp through a vat but with rates of 14 to 22 on bases between 60 and 40 of gdp for these the base could only be broadened if the tax rate were lowered copyright 1996 by mit press

earthquake fatalities the interaction of nature and political economy to say that the level of fatalities resulting from an earthquake is inversely related to a country s per capita level of income is hardly novel what makes our approach novel is that we relate fatalities to both per capita income and the level of inequality that exists within a country through their joint impact on the likelihood of collective action being taken to mitigate the destructive potential of quakes we first develop a theoretical model which offers an explanation as to why in some environments different segments of society prove incapable of arriving at what all parties perceive to be an agreeable distribution of the burden of the necessary collective action causing the relatively wealthy simply to self insure against the disaster while leaving the relatively poor to its mercy following this we test our theoretical model by evaluating 269 large earthquakes occurring worldwide between 1960 and 2002 taking into account other factors that influence a quake s destructiveness such as its magnitude depth and proximity to population centers using a negative binomial estimation strategy with both random and fixed estimators we find strong evidence of the theoretical model s predictions that is while earthquakes themselves are natural phenomena beyond the reach of humankind our collective inaction with respect to items like the creation and enforcement of building codes failure to retrofit structures and to enact quake sensitive zoning clearly plays a part in determining the actual toll that a given quake takes and it is through these and other examples of collective inaction that limited per capita income and inequality couple together with a given quake s natural destructive power in determining the actual fatalities resulting from a quake

tax evasion and heuristics a research note abstract the paper examines the heuristics which taxpayers use in making tax evasion decisions the following propositions are tested in an experiment using students first the taxpaper s own level of evasion will be positively related to what he perceives as the levels of evasion by others second taxpayers who have been audited are more likely to assess the probability of audit as higher and therefore decrease their levels of evasion the experimental results fail to support the first proposition but do support the second suggesting the presence of an availability effect

catastrophic natural disasters and economic growth this paper examines the short and long run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies the counterfactual of the cases studied is assessed by constructing synthetic control groups taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event it is found that only extremely large disasters have a negative effect on output both in the short and long run however this result appears in two events where radical political revolutions followed the natural disasters once these political changes are controlled for even extremely large disasters do not display any significant effect on economic growth it is also found that smaller but still very large natural disasters have no discernible effect on output

why countries are fiscally decentralizing this paper models and empirically investigates underlying forces that promote governmental decentralization or effective federalism in the world over the last 25 years a move to a federal system is based on the demand by hinterland regions for local autonomy which increases with national income growth greater relative hinterland population and increasing national population it is influenced as well by the degree of democratization nationally and locally decentralization is measured by both institutional indices indicating greater devolution of power to local governments and the share of local governments in national government consumption empirically the paper finds that decentralization changes in ways predicted in particular it increases with economic growth country size and population institutional structures based on colonial experience and initial constitutional provisions also matter

strategic trade policy learning by doing effects and economic development abstract this paper examines the general equilibrium consequences of temporary and permanent trade policy interventions in circumstances where the price of non tradeables endogenously adjusts to trade policy changes and where there may be learning by doing externality effects in the tradeables goods sector using a simple multisector dynamic model the paper demonstrates the difficulties of designing mixed and selective interventions such that the ex post real exchange rate and welfare outcomes are in line with the ex ante intent

no taxation without information deterrence and self enforcement in the value added tax abstract claims that the vat facilitates tax enforcement by generating paper trails on transactions between firms contributed to widespread vat adoption worldwide but there is surprisingly little evidence this paper analyzes the role of third party information for vat enforcement through two randomized experiments among over 400 000 chilean firms announcing additional monitoring has less impact on transactions that are subject to a paper trail indicating the paper trail s preventive deterrence effect this leads to strong enforcement spillovers up the vat chain these findings confirm that when taking evasion into account significant differences emerge between otherwise equivalent forms of taxation jel d83 h25 h26 k34 o17

fiscal federalism and economic growth this paper uses an endogenous growth model with overlapping generations to explore the connection between fiscal federalism and economic growth the analysis shows that federalism which allows public good levels to be tailored to suit the differing demands of young and old consumers who live in different jurisdictions increases the incentive to save this stronger incentive in turn leads to an increase in investment in human capital and a byproduct of this higher investment is faster economic growth

sudden stops and the mexican wave currency crises capital flow reversals and output loss in emerging markets sudden stops are the simultaneous occurrence of a currency balance of payments crisis with a reversal in capital flows we investigate whether sudden stop crises are a unique phenomenon and whether they entail an especially large and abrupt pattern of output collapse a bmexican waveq using a panel data set over 1975 1997 and covering 24 emerging market economies we distinguish between the output effects of currency crises capital inflow reversals and sudden stop crises sudden stop crises have a large negative but short lived impact on output growth over and above that found with currency crises a currency crisis typically reduces output by about 2 3 while a sudden stop reduces output by an additional 6 8 in the year of the crisis the cumulative output loss of a sudden stop is even larger around 13 15 over a 3 year period our model estimates correspond closely to the output dynamics of the dmexican wavet such as seen in mexico in 1995 turkey in 1994 and elsewhere and out of sample predictions of the model explain well the sudden and seemingly unexpected collapse in output associated with the 1997 1998 asian crisis d 2005 elsevier b v all rights reserved

does rising income increase or decrease damage risk from natural disasters abstract recent empirical literature has found a negative relationship between income per capita and measures of risk from natural disaster supportive of logic that higher incomes allow countries to mitigate disaster risk we argue that behavioral changes at the micro level in response to increasing income such as location choice and extent of costly abatement activity may lead to a non linear relationship between aggregate incomes and disaster damages where the risks increase with income before they decrease in a country year panel data set we show that disaster risk associated with flooding landslides and windstorms increases with income up to gdp per capita levels of 5044 3360 and 4688 per year respectively and decrease thereafter such non linear impacts are absent for other disaster types such as extreme temperature events and earthquakes where the links between human behavioral choices and exposure to risk are not as strong from a policy perspective this suggests that for the least developed countries the dual goals of disaster risk prevention and economic development cannot be assumed to be complementary for all forms of natural disaster in addition to allocating resources to manage disaster risk the poorest nations may have to be more proactive in enacting policies that alter the behavioral choices of citizens that impact a country s exposure to natural disaster risk

are external shocks responsible for the instability of output in low income countries external shocks such as commodity price fluctuations natural disasters and the role of the international economy are often blamed for the poor economic performance of low income countries the author quantifies the impact of these different external shocks using a panel vector autoregression var approach and compares their relative contributions to output volatility in low income countries vis a vis internal factors he finds that external shocks can only explain a small fraction of the output variance of a typical low income country internal factors are the main source of fluctuations from a quantitative perspective the output effect of external shocks is typically small in absolute terms but significant relative to the historic performance of these countries

the open society assesses its enemies shocks disasters and terrorist attacks abstract this paper conducts a systematic investigation of the incidence and economic costs of terrorist attacks at the country level we use newly assembled datasets on terrorist attacks natural disasters and currency crises to answer three different questions what are the determinants of terrorism is there an output cost following a terrorist attack and is that cost larger or smaller in the case of democracies we find that rich countries are the most prone to suffer attacks while democracies are if anything less vulnerable than other countries the cost to output of a terrorist attack is quantitatively small and closely associated with the occurrence of an event rather than the number of casualties finally we find robust evidence that a terrorist attack imposes a lower output cost the more democratic a country is

sudden stops banking crises and investment collapses in emerging markets abstract we evaluate whether financial openness leaves emerging market economies vulnerable to the adverse effects of capital reversals sudden stops on domestic investment we investigate this claim in a broad sample of emerging markets during the period 1976 2002 if the banking sector does not experience a systemic crisis sudden stop events fail to have a significant impact on investment bank crises on the other hand have a significant negative effect on investment even in the absence of a contemporaneous sudden stop crisis we also find that openness to capital flows worsens the adverse impact of banking crises on investment our results provide statistical support for the policy view that a strong banking sector which can withstand the negative fallout of capital flight is essential for countries that open their economies to international financial flows

decentralization of governance and development all around the world in matters of governance decentralization is the rage even apart from the widely debated issues of subsidiarity and devolution in the european union and states rights in the united states decentralization has been at the center stage of policy experiments in the last two decades in a large number of developing and transition economies in latin america africa and asia the world bank for example has embraced it as one of the major governance reforms on its agenda for example world bank 2000 burki perry and dillinger 1999 take also the examples of the two largest countries of the world china and india decentralization has been regarded as the major institutional framework for the phenomenal industrial growth in the last two decades in china taking place largely in the nonstate nonprivate sector india ushered in a landmark constitutional reform in favor of decentralization around the same time it launched a major program of economic reform in the early 1990s on account of its many failures the centralized state everywhere has lost a great deal of legitimacy and decentralization is widely believed to promise a range of benee ts it is often suggested as a way of reducing the role of the state in general by fragmenting central authority and introducing more intergovernmental competition and checks and balances it is viewed as a way to make government more responsive and efe cient technological changes have also made it somewhat easier than before to provide public services like electricity and water supply relatively efe ciently in smaller market areas and the lower levels of government have now a greater ability to handle certain tasks in a world of rampant ethnic cone icts and separatist movements decentralization is also regarded as a way of diffusing social and political tensions and ensuring local cultural and political autonomy these potential benee ts of decentralization have attracted a very diverse range

natural disasters impact factors of resilience and development a meta analysis of the macroeconomic literature abstract we systematize 64 primary studies published in 2000 2013 on the macroeconomic impact of natural disasters by providing ols and generalized ordered probit meta analyses for 1858 and 1991 regressions respectively we investigate how the reported results in the primary studies are influenced by the empirical design the estimation technique and or publication bias we analyze primary studies on disaster direct costs and indirect costs separately according to our meta analysis disasters on average have a negative impact in terms of direct costs and an insignificant impact in terms of indirect costs mst and fat pet peese estimates motivate the meta analyses showing the need for a multivariate approach to consider strong systematic research heterogeneity time based characteristics of the data and publication bias strongly impact on the results of the primary studies thus implying the need for authors to carefully consider the selection of time period and for research institutions to understand the sources of selection bias in disseminated results we argue that further research is necessary on the heterogeneity of results of indirect cost studies and suggest that future studies on the macroeconomic impact of disasters should explore more often the mitigation role of education investment and openness by including these as explanatory variables

does the exchange rate regime matter for real shocks evidence from windstorms and earthquakes abstract does the choice of exchange rate regime affect an economy s adjustment to real shocks exploiting the unpredictability and economic exogeniety of windstorms hurricanes and typhoons and earthquakes this paper assesses the often contrasting answers found in the theoretical literature there is robust evidence that exchange rate flexibility helps an economy better adjust to real shocks and consistent with the channels emphasized in the classic literature on exchange rates and shocks differences in the behavior of the export sector help explain the different reactions between the two regimes

fiscal decentralization and economic growth reconsidered recent studies examining the relation between fiscal decentralization and economic growth have failed to take account of the extent of the independent taxing powers available to sub national governments and thus have substantially overstated the degree of effective decentralization results from a cross section study of 19 oecd member countries suggest that when the measure of fiscal decentralization is limited to the revenues over which sub national governments have full autonomy its impact on economic growth is not statistically significant

unwilling or unable to cheat evidence from a tax audit experiment in denmark this paper analyzes a tax enforcement field experiment in denmark in the base year a stratified and representative sample of over 40 000 individual income tax filers was selected for the experiment half of the tax filers were randomly selected to be thoroughly audited while the rest were deliberately not audited the following year threat of audit letters were randomly assigned and sent to tax filers in both groups we present three main empirical findings first using baseline audit data we find that the tax evasion rate is close to zero for income subject to third party reporting but substantial for self reported income since most income is subject to third party reporting the overall evasion rate is modest second using quasi experimental variation created by large kinks in the income tax schedule we find that marginal tax rates have a positive impact on tax evasion for self reported income but that this effect is small in comparison to legal avoidance and behavioral responses third using the randomization of enforcement we find that prior audits and threat of audit letters have significant effects on self reported income but no effect on third party reported income all these empirical results can be explained by extending the standard model of rational tax evasion to allow for the key distinction between self reported and third party reported income

natural disaster situations and growth a macroeconomic model for sudden disaster impacts the aim of this paper is to examine the relation between a natural disaster situation and its potential effects on the growth rate of output by means of a simple macroeconomic model which is later applied as a demonstration to a sample of countries affected by major natural disasters in the last two decades this quantitative application appears to support the model the main conclusions are that capital loss is unlikely to have an important effect on growth and that a very moderate response expenditure may be sufficient to prevent the growth rate of output from falling a general derived conclusion is that foreign and public disaster response may be better used to help actual victims and affected activities directly than to proceed on the rather unsound prima facie belief that the economy will be heavily affected by the disaster

fiscal decentralization and natural hazard risks at least to some extent due to pressure from international donors many countries have become more fiscally decentralized the underlying premise being that greater decentralization might improve the provision of local public goods and services we test this proposition by determining whether relatively more decentralized countries fare better when natural disasters strike in terms of its effects on the population overall we find evidence supporting our maintained hypothesis though the effect appears much more robust in developing countries

migration risk and liquidity constraints in el salvador abstract this article utilizes panel data from el salvador to investigate the use of transnational migration as an ex post risk management strategy i show that adverse agricultural conditions in el salvador increase both migration to the united states and remittances sent back to el salvador i show that in the absence of any agricultural shocks the probability that a household sent members to the united states would have decreased on average by 24 26 i also show that the 2001 earthquakes reduced net migration to the united states a one standard deviation increase in earthquake damage reduced the average probability of northward migration by 37 11 the evidence suggests that the effects of the earthquakes had more to do with households retaining labor at home to cope with the effects of the disaster than with the earthquakes disrupting migration financing

the macroeconomic consequences of disasters abstract natural disasters have a statistically observable adverse impact on the macro economy in the short run and costlier events lead to more pronounced slowdowns in production yet interestingly developing countries and smaller economies face much larger output declines following a disaster of similar relative magnitude than do developed countries or bigger economies a close study of the determinants of these adverse macroeconomic output costs reveals several interesting patterns countries with a higher literacy rate better institutions higher per capita income higher degree of openness to trade and higher levels of government spending are better able to withstand the initial disaster shock and prevent further spillovers into the macro economy these all suggest an increased ability to mobilize resources for reconstruction financial conditions also seem to be of importance countries with more foreign exchange reserves and higher levels of domestic credit but with less open capital accounts appear more robust and better able to endure natural disasters with less adverse spillover into domestic production

estimating the direct economic damages of the earthquake in haiti this paper uses simple regression techniques to make an initial assessment of the monetary damages caused by the january 12 2010 earthquake that struck haiti damages are estimated for a disaster with both 200 000 and 250 000 total dead and missing i e the range of mortality that the earthquake is estimated to have caused using haitis economic and demographic data the base estimate is us 8 1bn for a death toll of 250 000 but for several reasons this may be a lower bound estimate an estimate of us 13 9bn for the same death toll is within statistical error while the results are subject to many caveats the implications of such an estimate are significant raising such a figure will require many donorsbilateral multilateral and private hence excellent coordination of funding and execution will be the key to ensuring the efficient use of funds

decentralization and corruption evidence across countries the relationship between decentralization of government activities and the extent of rent extraction by private parties is an important element in the recent debate on institutional design the theoretical literature makes ambiguous predictions about this relationship and it has remained virtually unexamined by empiricists the authors make a first attempt at examining the issue empirically by looking at the cross country relationship between fiscal decentralization and corruption as measured by a number of different indices their estimates suggest that fiscal decentralization in government spending is significantly associated with lower corruption moreover they find that the origin of a country s legal system for example civil versus common legal code performs extremely well as an instrument for decentralization the estimated relationship between decentralization when so instrumented and corruption is even stronger the evidence suggests a number of interesting areas for future work including investigating whether there are specific services for which decentralized provision has a particularly strong impact on political rent extraction and understanding the channels through which decentralization succeeds in keeping corruption in check

putting firms into optimal tax theory firms are for the most part absent from the modern theory of optimal taxation their disappearance dates from the foundational models developed by peter a diamond and james a mirrlees 1971 in which firms are simply mechanical vehicles for combining productive inputs into output in cost minimizing proportions in contrast firms play a central role in all modern tax systems mostly for a reason stated by richard m bird 1996 the key to effective taxation is information and the key to information in the modern economy is the corporation in most countries firms remit the majority of tax revenues to the government either with regard to taxes legally owed by businesses or through withholding of taxes legally owed by employees or other businesses even when businesses are not required to remit taxes they are often required to file information reports that can facilitate monitoring of tax liabilities the lack of a theoretical framework that features firms impedes rigorous welfare analysis of a number of important policy issues one such example is the comparative evaluation of a uniform retail sales tax rst versus a value added tax vat in the standard model these two taxes both remitted entirely by businesses are equivalent consumption taxes but most experts consider the vat to be clearly superior on administrative grounds a view echoed in the recent report of the president s advisory panel on federal tax reform 2005 we propose a simple framework in which these and other issues can be analyzed the new framework recognizes that a tax code must be backed up by an administrative and enforcement structure

cheating ourselves the economics of tax evasion no government can announce a tax system and then rely on taxpayers sense of duty to remit what is owed some dutiful people will undoubtedly pay what they owe but many others will not over time the ranks of the dutiful will shrink as they see how they are being taken advantage of by the others thus paying taxes must be made a legal responsibility of citizens with penalties attendant on noncompliance but even in the face of those penalties substantial tax evasion exists and always has the history of taxation is replete with episodes of evasion often notable for their inventiveness during the third century many wealthy romans buried their jewelry or stocks of gold coin to evade the luxury tax and homeowners in eighteenth century england temporarily bricked up their fireplaces to escape notice of the hearth tax collector webber and wildavsky 1986 p 141 this essay reviews what is known about the magnitude nature and determinants of tax evasion with an emphasis on the u s income tax alm 1999 andreoni erard and feinstein 1998 and slemrod and yitzhaki 2002 offer more comprehensive recent reviews of the literature it then places this information into a conceptual and policy context

using weather variability to estimate the response of savings to transitory income in thailand this paper measures the extent to which farmers are able to use savings and dissavings to smooth consumption in response to unexpected shocks to income time series information on regional rainfall is used to construct estimates of transitory income due to rainfall shocks the relationship between these measures of transitory income and savings indicates that farm households save a significantly higher fraction of transitory income than nontransitory income jel d91 016 the incomes of farm households in developing countries are notorious for being both low and uncertain policies that increase the incomes of farmers may well be different

aid catastrophes and the samaritan s dilemma this paper discusses the impact of foreign aid on the recipient country s preparedness against natural disasters the theoretical model shows that foreign aid can have two opposing eects on a country s level of mitigating activities in order to test the theoretical propositions we analyse the eect of foreign aid dependence on ex ante riskmanagement activity proxied by the death toll from major storms floods and earthquakes occurring worldwide between 1980 and 2002 we find evidence that the crowding out eect of foreign aid outweighs the preventive eect in the case of storms while there is mixed evidence in the case of floods and earthquakes

the macroeconomic impacts of natural disasters the case of floods we use panel vector autoregression models to trace the dynamic response of output growth to flood shocks using new data on large flood events in 135 countries between 1985 and 2008 flood shocks tend to have a positive and significant average impact on per capita gdp growth however this effect is limited to developing countries and to moderate floods the positive impact of floods is larger and more significant in the agricultural sector while floods seem to have a direct effect on agricultural growth rates in developing countries their effect on nonagricultural growth rates is mainly indirect jel o11 q54

why do firms evade taxes the role of information sharing and financial sector outreach tax evasion is a widespread phenomenon across the globe and even an important factor in the ongoing sovereign debt crisis we show that firms in countries with better credit information sharing systems and higher branch penetration evade taxes to a lesser degree this effect is stronger for smaller firms firms in smaller cities and towns firms in industries relying more on external financing and firms in industries and countries with greater growth potential this effect is robust to instrumental variable analysis controlling for firm fixed effects in a smaller panel data set of countries and many other robustness tests

economic development and losses due to natural disasters the role of hazard exposure abstract our contribution is to show that the relationship between wealth and disasters is mainly formed by the exposure to disaster hazard we first build a simple analytical model that demonstrates how countries that face a low hazard of disasters are likely to see first increasing losses and then decreasing ones with increasing economic development at the same time countries that face a high hazard of disasters are likely to experience first decreasing losses and then increasing ones with increasing economic development we then use a cross country panel dataset in conjunction with a hazard exposure index to investigate whether the data is consistent with the predictions from the model in line with our model we find that the relationship of losses with wealth crucially depends on the level of hazard of natural disasters faced by countries

trade policy and growth of developing countries some new data abstract the present study provides empirical evidence on trade policy and economic growth of developing countries our data indicate that adverse changes in world demand carried greater weight in determining export performance than changes in trade policy the results presented confirm that high growth rates of export earnings occur only when external demand to strong low income countries are shown to fare worse across all time periods though there are regional variations these are not due solely to differences in trade policy thus an outward oriented policy is not necessarily a valid policy recommendation for all conditions and all countries

optimal taxation and optimal tax systems the theory of optimal taxation has for the pas two decades been the reigning normative approach of taxation this paper argues that in its current state optimal tax theory is incomplete as a guide to action concerning many critical issues in tax policy it is incomplete because it has not yet come to terms with taxation as a system of coercively collecting revenues from individuals who will tend to resist the coercive nature of collection taxes implies that the resource cost of implementing a tax system have been and will continue to be a critical determinant of appropriate tax policy the paper first presents the three cornerstone propositions of optimal tax theory and then it discusses the influence of these propositions on recent tax policy developments it concludes by sketching an alternative to optimal taxation called the theory of optimal tax systems which embraces the insights of optimal taxation but also considers the technology of raising taxes and the constraints placed upon tax policy by that technology the optimal tax systems perspective is shown to shed light on the choice of tax instruments the problem of tax evasion and the appropriate tax treatment of capital income this abstract was borrowed from another version of this item

does credit card information reporting improve small business tax compliance we investigate the response of small businesses operating as sole proprietorships to form 1099 k an information report introduced in 2011 which provides the internal revenue service with information about electronic sales e g credit card sales the overall impact of the policy appears to be relatively small however theory and distributional analysis isolates a subset of taxpayers expected to be especially sensitive to reporting who report receipts equal to or slightly exceeding the receipts reported on 1099 k among this set of taxpayers information reporting induced more complete tax reporting 30 of sensitive taxpayers filed a return declaring business income for the first time and among those that were already filing we estimate an increase in reported receipts by up to 24 these taxpayers largely offset increased reported receipts with increased reported expenses which do not face information reporting diminishing the impact on reported net taxable income

economic development and the impacts of natural disasters abstract we use disaster impact data over time to examine the degree to which the human and economic losses from natural disasters are reduced as economies develop we find that countries with higher income higher educational attainment greater openness more complete financial systems and smaller government experience fewer losses

the growth aftermath of natural disasters this paper provides a description of the macroeconomic aftermath of natural disasters it traces the yearly response of gross domestic product growth both aggregated and disaggregated into its agricultural and non agricultural components to four types of natural disasters droughts floods earthquakes and storms the paper uses a methodological approach based on pooling the experiences of various countries over time it consists of vector auto regressions in the presence of endogenous variables and exogenous shocks varx applied to a panel of cross country and time series data the analysis finds heterogeneous effects on a variety of dimensions first the effects of natural disasters are stronger for better or worse on developing than on rich countries second while the impact of some natural disasters can be beneficial when they are of moderate intensity severe disasters never have positive effects third not all natural disasters are alike in terms of the growth response they induce and perhaps surprisingly some can entail benefits regarding economic growth thus droughts have a negative effect on both agricultural and non agricultural growth in contrast floods tend to have a positive effect on economic growth in both major sectors earthquakes have a negative effect on agricultural growth but a positive one on non agricultural growth storms tend to have a negative effect on gross domestic product growth but the effect is short lived and small future research should concentrate on exploring the mechanisms behind these heterogeneous impacts

true protection concepts and their role in evaluating trade policies in ldcs in many ldcs it is not uncommon to find incentives designed to encourage import substitution activities coexisting alongside incentives aimed at encouraging export activities this article evaluates a recent approach to evaluating commercial policy which among other things highlights some of the implications of simultaneously pursuing import substitution and export promotion the study develops a model which emphasises the incidence of protection and identifies the concept of true protection empirical results for a number of ldcs are discussed and the implications of these results evaluated in addition the article contrasts this approach with the effective protection approach to evaluating commercial policy

natural disasters and the effect of trade on income a new panel iv approach natural disasters affect bilateral trade we use this fact to generalize the instrumental variables strategy of frankel and romer 1999 to a panel setup this allows revisiting an old question does openness cause per capita gdp we work with a modified gravity framework in which we interact foreign natural disasters with geography predicting the exogenous component of bilateral trade flows and aggregating over trade partners we obtain a time varying instrument for multilateral openness of a country controlling for constant determinants of income history geography by means of fixed effects we find a robust positive effect of trade on income averaging 0 74 the estimated elasticity is substantially smaller than the one obtained in the cross section poor or non oecd countries feature a larger elasticity

fiscal decentralization and economic growth a cross country study abstract we use a panel data set of 46 countries over the 1970 1989 period to investigate the relationship between fiscal decentralization and economic growth we find a negative relationship between fiscal decentralization and growth in developing countries but none in developed countries several explanations are offered for our findings

decentralization and the productive efficiency of government evidence from swiss cantons advocates of fiscal decentralization argue that among other benefits it can increase the efficiency of delivery of government services this paper is one of the first to evaluate this claim empirically by looking at the association between expenditure decentralization and the productive efficiency of government using a data set of swiss cantons we first provide careful evidence that expenditure decentralization is a powerful proxy for legal local autonomy further panel regressions of swiss cantons provide robust evidence that more decentralization is associated with higher educational attainment we also show that these gains lead to no adverse effects across education types but that male students benefited more from educational decentralization closing for the swiss case the gender education gap

informing climate adaptation a review of the economic costs of natural disasters abstract this paper reviews the empirical literature on the economic impacts of natural disasters to inform both the modeling of potential future climate damages and climate adaptation policy related to extreme events it covers papers that estimate the short and or long run economic impacts of weather related extreme events as well as studies identifying the determinants of the magnitude of those damages including fatalities the paper also reviews the small number of empirical papers on the potential extent of adaptation in response to changing extreme events

does formality improve micro firm performance evidence from the brazilian simples program abstract this paper exploits an extensive brazilian micro enterprise survey and the 1996 introduction of a business tax reduction and simplification scheme simples to examine three questions first do high tax rates and complex tax regulations really constitute a barrier to the formalization of micro firms second does formalization improve firm performance measured along several dimensions including revenues employment and capital stock third what are the channels through which this occurs we find that simples led to a significant increase in formality in several dimensions moreover newly created firms that opt for operating formally show higher levels of revenue and profits employ more workers and are more capital intensive only for those firms that have employees the channel through which this occurs is not access to credit or contracts with larger firms rather it appears that the lower cost of contracting labor leads to adopting production techniques that involve a permanent location and a larger paid labor force