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Corruptibility and tax evasion

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  • Roy Cerqueti
  • Raffaella Coppier

Abstract

Reduction of fiscal evasion may be pursued by introducing incentive schemes for tax inspectors. The aim of this paper is to explain the role of such bonuses in an economic environment with corruption, i.e. in a world where entrepreneurs and tax inspectors are open to bribery. In detail, we analyze the role of a public incentive scheme, where the tax inspector’s bargaining strength is endogenous with respect to an incentive mechanism: indeed the knowledge that even if an entrepreneur does not agree to pay the bribe, s/he can report tax evasion and be partly rewarded for this, increases the tax inspector’s bargaining strength. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Roy Cerqueti & Raffaella Coppier, 2015. "Corruptibility and tax evasion," European Journal of Law and Economics, Springer, vol. 39(2), pages 355-373, April.
    • Handle: RePEc:kap:ejlwec:v:39:y:2015:i:2:p:355-373
    DOI: 10.1007/s10657-013-9406-z
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    References listed on IDEAS

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    1. Chand, Sheetal K. & Moene, Karl O., 1999. "Controlling Fiscal Corruption," World Development, Elsevier, vol. 27(7), pages 1129-1140, July.
    2. Fjeldstad, Odd-Helge & Tungodden, Bertil, 2003. ""Fiscal Corruption: A Vice or a Virtue"--A Reply," World Development, Elsevier, vol. 31(8), pages 1473-1475, August.
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    Cited by:

    1. Rainer Niemann & Mariana Sailer, 2023. "Is analytical tax research alive and kicking? Insights from 2000 until 2022," Journal of Business Economics, Springer, vol. 93(6), pages 1149-1212, August.

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    More about this item

    Keywords

    Corruption; Bayesian game; Tax evasion; D73; H26; K42;
    All these keywords.

    JEL classification:

    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

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