Introduction Estimating the economic costs of opacity has several advantages.
Second, the calculated tax-equivalent is invariant with respect to any linear transformation of the survey scores. While the tax-equivalent is estimated based on data on FDI, the estimates apply to domestic investment as well under some mild assumptions, which are explained in this appendix. Of course, the calculations involve assumptions. Therefore, the exact magnitude of the effect is reported for illustration only. The methodology used in the calculation is explained below, which allows readers to do alternative calculations using alternative assumptions.