IDEAS home Printed from https://ideas.repec.org/a/fan/epepep/vhtml10.3280-ep2014-001004.html
   My bibliography  Save this article

Un indicatore sintetico dell?Illusione Finanziaria. Un tentativo di stima per l?Italia

Author

Listed:
  • Roberto Dell'Anno
  • Morena De Stefano

Abstract

The fiscal (or financial) illusion refers to the mechanisms that affect the perception of the economic agent about the subjective evaluation of costs and benefits of public policies. This paper aims to contribute to a long and still ongoing discussion in the empirical literature regarding the relevance of fiscal illusion for the current tax systems. Authors review main empirical literature on fiscal illusion in order to estimate an overall index of fiscal illusion. The index is estimated for the Italian economy over the period 1995-2009 by applying Factor analysis approach. Fiscal illusion has decreased from 1995 to 2003, later it has remained steady up to 2009.

Suggested Citation

  • Roberto Dell'Anno & Morena De Stefano, 2014. "Un indicatore sintetico dell?Illusione Finanziaria. Un tentativo di stima per l?Italia," ECONOMIA PUBBLICA, FrancoAngeli Editore, vol. 2014(1), pages 65-92.
    • Handle: RePEc:fan:epepep:v:html10.3280/ep2014-001004
    as

    Download full text from publisher

    File URL: http://www.francoangeli.it/riviste/Scheda_Rivista.aspx?IDArticolo=51189&Tipo=ArticoloPDF
    Download Restriction: Single articles can be downloaded buying download credits, for info: https://www.francoangeli.it/DownloadCredit
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Bergstrom, Theodore C & Goodman, Robert P, 1973. "Private Demands for Public Goods," American Economic Review, American Economic Association, vol. 63(3), pages 280-296, June.
    2. Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
    3. Vincent Munley & Kenneth Greene, 1978. "Fiscal illusion, the nature of public goods and equation specification," Public Choice, Springer, vol. 33(1), pages 95-100, March.
    4. John Horn, 1965. "A rationale and test for the number of factors in factor analysis," Psychometrika, Springer;The Psychometric Society, vol. 30(2), pages 179-185, June.
    5. Richard Wagner, 1976. "Revenue structure, fiscal illusion, and budgetary choice," Public Choice, Springer, vol. 25(1), pages 45-61, March.
    6. Galli, Emma & Ricciuti, Roberto, 2009. "Sulla political economy del deficit pubblico nell'Italia liberale," POLIS Working Papers 127, Institute of Public Policy and Public Choice - POLIS.
    7. Rupert Sausgruber & Jean-Robert Tyran, 2005. "Testing the Mill hypothesis of fiscal illusion," Public Choice, Springer, vol. 122(1), pages 39-68, January.
    8. Brennan,Geoffrey & Buchanan,James M., 2006. "The Power to Tax," Cambridge Books, Cambridge University Press, number 9780521027922.
    9. Werner W. Pommerehne & Friedrich Schneider*, 1978. "Fiscal Illusion, Political Institutions, And Local Public Spending," Kyklos, Wiley Blackwell, vol. 31(3), pages 381-408, August.
    10. Roberto Dell’Anno & Paulo Mourao, 2012. "Fiscal Illusion around the World," Public Finance Review, , vol. 40(2), pages 270-299, March.
    11. Dollery, Brian E & Worthington, Andrew C, 1996. "The Empirical Analysis of Fiscal Illusion," Journal of Economic Surveys, Wiley Blackwell, vol. 10(3), pages 261-297, September.
    12. André Beauducel, 2007. "In Spite of Indeterminacy Many Common Factor Score Estimates Yield an Identical Reproduced Covariance Matrix," Psychometrika, Springer;The Psychometric Society, vol. 72(3), pages 437-441, September.
    13. Anthony Downs, 1957. "An Economic Theory of Political Action in a Democracy," Journal of Political Economy, University of Chicago Press, vol. 65, pages 135-135.
    14. E. West & Stanley Winer, 1980. "Optimal fiscal illusion and the size of government," Public Choice, Springer, vol. 35(5), pages 607-622, January.
    15. Clotfelter, Charles T, 1976. "Public Spending for Higher Education: An Empirical Test of Two Hypotheses," Public Finance = Finances publiques, , vol. 31(2), pages 177-195.
    16. Worthington, Andrew C & Dollery, Brian E, 1999. "Fiscal Illusion and the Australian Local Government Grants Process: How Sticky Is the Flypaper Effect?," Public Choice, Springer, vol. 99(1-2), pages 1-13, April.
    17. Harry Harman, 1941. "On the rectilinear prediction of oblique factors," Psychometrika, Springer;The Psychometric Society, vol. 6(1), pages 29-35, February.
    18. Charles H. Breeden & William J. Hunter, 1985. "Tax Revenue and Tax Structure," Public Finance Review, , vol. 13(2), pages 216-224, April.
    19. Buchanan, James M, 1976. "Barro on the Ricardian Equivalence Theorem," Journal of Political Economy, University of Chicago Press, vol. 84(2), pages 337-342, April.
    20. Bert Green, 1976. "On the factor score controversy," Psychometrika, Springer;The Psychometric Society, vol. 41(2), pages 263-266, June.
    21. Wayne Velicer, 1976. "Determining the number of components from the matrix of partial correlations," Psychometrika, Springer;The Psychometric Society, vol. 41(3), pages 321-327, September.
    22. Samuel H. Baker, 1983. "The Determinants of Median Voter Tax Liability: an Empirical Test of the Fiscal Illusion Hypothesis," Public Finance Review, , vol. 11(1), pages 95-108, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Walter Misiolek & Harold Elder, 1988. "Tax structure and the size of government: An empirical analysis of the fiscal illusion and fiscal stress arguments," Public Choice, Springer, vol. 57(3), pages 233-245, June.
    2. Facchini, Francois, 2014. "The determinants of public spending: a survey in a methodological perspective," MPRA Paper 53006, University Library of Munich, Germany.
    3. F. Forte, 1997. "The measurement of 'fiscal burden' on GDP instead than on national net value added produced: a chapter in fiscal illusion," BNL Quarterly Review, Banca Nazionale del Lavoro, vol. 50(202), pages 337-375.
    4. Roberto Dell’Anno & Brian Dollery, 2014. "Comparative fiscal illusion: a fiscal illusion index for the European Union," Empirical Economics, Springer, vol. 46(3), pages 937-960, May.
    5. Roberto Dell'Anno & Vincenzo Maria De Rosa, 2013. "The Relevance of the Theory of Fiscal Illusion. The Case of the Italian Tax System," HISTORY OF ECONOMIC THOUGHT AND POLICY, FrancoAngeli Editore, vol. 2013(2), pages 63-92.
    6. Musharraf Cyan & Jorge Martinez-Vazquez & VIoleta Vulovic, 2013. "Measuring tax effort: Does the estimation approach matter and should effort be linked to expenditure goals?," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1308, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    7. Haug, Peter, 2009. "Shadow Budgets, Fiscal Illusion and Municipal Spending: The Case of Germany," IWH Discussion Papers 9/2009, Halle Institute for Economic Research (IWH).
    8. Andrew Abbott & Philip Jones, 2016. "Fiscal Illusion and Cyclical Government Expenditure: State Government Expenditure in the United States," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(2), pages 177-193, May.
    9. Brian Dollery & Andrew Worthington, 1999. "Fiscal Illusion at the Local Level: An Empirical Test Using Australian Municipal Data," The Economic Record, The Economic Society of Australia, vol. 75(1), pages 37-48, March.
    10. Yongzheng Liu & Haibo Feng, 2015. "Tax structure and corruption: cross-country evidence," Public Choice, Springer, vol. 162(1), pages 57-78, January.
    11. Andreas Buehn & Roberto Dell’Anno & Friedrich Schneider, 2018. "Exploring the dark side of tax policy: an analysis of the interactions between fiscal illusion and the shadow economy," Empirical Economics, Springer, vol. 54(4), pages 1609-1630, June.
    12. Hammed Amusa & Robert Mabunda & Ramos Mabugu, 2008. "Fiscal Illusion At The Local Sphere: An Empirical Test Of The Flypaper Effect Using South African Municipal Data1," South African Journal of Economics, Economic Society of South Africa, vol. 76(3), pages 443-465, September.
    13. D.P. Doessel & Abbas Valadkhani, 2002. "Public Finance and The Size of Government: A Literature Review and Econometric Results for Fiji," School of Economics and Finance Discussion Papers and Working Papers Series 108, School of Economics and Finance, Queensland University of Technology.
    14. Michael A. Nelson, 1986. "Voter Perceptions of the Cost of Government: the Case of Local School Expenditures in Louisiana," Public Finance Review, , vol. 14(1), pages 48-68, January.
    15. Benoît Le Maux, 2009. "Governmental behavior in representative democracy: a synthesis of the theoretical literature," Public Choice, Springer, vol. 141(3), pages 447-465, December.
    16. Stanley L. Winer & Walter Hettich, 2002. "The Political Economy of Taxation: Positive and Normative Analysis when Collective Choice Matters," Carleton Economic Papers 02-11, Carleton University, Department of Economics, revised 2004.
    17. Martin Baekgaard & Søren Serritzlew & Jens Blom-Hansen, 2016. "Causes of Fiscal Illusion: Lack of Information or Lack of Attention?," Public Budgeting & Finance, Wiley Blackwell, vol. 36(2), pages 26-44, June.
    18. H. Spencer Banzhaf & Wallace E. Oates, 2012. "On Fiscal Illusion and Ricardian Equivalence in Local Public Finance," NBER Working Papers 18040, National Bureau of Economic Research, Inc.
    19. Francois Facchini, 2018. "What Are the Determinants of Public Spending? An Overview of the Literature," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 46(4), pages 419-439, December.
    20. George Boyne, 1987. "Median voters, political systems and public policies: An empirical test," Public Choice, Springer, vol. 53(3), pages 201-219, January.

    More about this item

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fan:epepep:v:html10.3280/ep2014-001004. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Stefania Rosato (email available below). General contact details of provider: http://www.francoangeli.it/riviste/sommario.aspx?IDRivista=16 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.