Poverty, taxation and governance
AbstractIn a simple model based on political support approach, we show that poor and less egalitarian societies may impose a lower tax rate contrary to the prediction of the median voter approach. This is consistent with the available empirical findings. In the framework developed in this paper, the government can strategically design a weak governance system to promote informal activities for the poor. This constitutes an alternative redistributive strategy other than the standard tax-transfer policy. The government chooses the tax rate and the degree of governance simultaneously to maximize the average income of the poor in the informal sector of the economy, i.e. those who constitute the majority and help in winning the election.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.
Volume (Year): 15 (2006)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.tandfonline.com/RJTE20
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Persson, T. & Tabellini, G., 1997.
"Political Economics and Macroeconomic Policy,"
630, Stockholm - International Economic Studies.
- Torsten Persson & Guido Tabellini, 1997. "Political Economics and Macroeconomic Policy," NBER Working Papers 6329, National Bureau of Economic Research, Inc.
- Persson, Torsten & Tabellini, Guido, 1997. "Political Economics and Macroeconomic Policy," CEPR Discussion Papers 1759, C.E.P.R. Discussion Papers.
- Persson, Torsten & Tabellini , Guido, 1997. "Political Economics and Macroeconomic Policy," Seminar Papers 630, Stockholm University, Institute for International Economic Studies.
- Torsten Persson & Guido Tabellini, . "Political Economics and Macroeconomic Policy," Working Papers 121, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
- Marcouiller, Douglas & Young, Leslie, 1995. "The Black Hole of Graft: The Predatory State and the Informal Economy," American Economic Review, American Economic Association, vol. 85(3), pages 630-46, June.
- Hillman,Arye L., 2009.
"Public Finance and Public Policy,"
Cambridge University Press, number 9780521738057.
- Marjit, Sugata, 2003. "Economic reform and informal wage--a general equilibrium analysis," Journal of Development Economics, Elsevier, vol. 72(1), pages 371-378, October.
- Paul, Gilles Saint & Verdier, Thierry, 1996. "Inequality, redistribution and growth: A challenge to the conventional political economy approach," European Economic Review, Elsevier, vol. 40(3-5), pages 719-728, April.
- Marjit, Sugata, 2009.
"Firm Heterogeneity, Informal Wage and Good Governance,"
19168, University Library of Munich, Germany.
- Sugata Marjit & Saibal Kar, 2012. "Firm Heterogeneity, Informal Wage and Good Governance," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 527-539, November.
- Sugata Marjit & Saibal Kar, . "Firm Heterogeneity, Informal Wage and Good Governance," Discussion Papers 11/23, University of Nottingham, GEP.
- Kar, Saibal & Marjit, Sugata, 2011. "Firm Heterogeneity, Informal Wage and Good Governance," IZA Discussion Papers 5978, Institute for the Study of Labor (IZA).
- Broll, Udo & Kemnitz, Alexander & Mukherjee, Vivekananda, 2009. "Globalization and a welfare program for the marginalized," Dresden Discussion Paper Series in Economics 05/09, Dresden University of Technology, Faculty of Business and Economics, Department of Economics.
- Marroquín Arreola, Juan & Rios Bolívar, Humberto, 2012. "Gasto público, permanencia en el poder y crecimiento económico /Public Spending, Staying Power and Economic Growth," Estudios de Economía Aplicada, Estudios de Economía Aplicada, vol. 30, pages 363 (22 pag, Abril.
- Dutta, Nabamita & Kar, Saibal & Roy, Sanjukta, 2013. "Corruption and persistent informality: An empirical investigation for India," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 357-373.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).
If references are entirely missing, you can add them using this form.