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Ghost-House Busters: The Electoral Response to a Large Anti Tax Evasion Program

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  • Lorenzo Casaburi
  • Ugo Troiano

Abstract

The incentives of political agents to enforce tax collection are key determinants of the levels of compliance. We study the electoral response to the Ghost Buildings program, a nationwide anti-tax evasion policy in Italy that used innovative monitoring technologies to target buildings hidden from tax authorities. The program induced monetary and non-monetary benefits for non-evaders. A one standard deviation increase in town-level program intensity leads to a 4.8 percent increase in local incumbent reelection rates. In addition, these political returns are higher in areas with lower tax evasion tolerance and with higher efficiency of public good provision, implying complementarity among enforcement policies, the underlying tax culture, and the quality of the government.

Suggested Citation

  • Lorenzo Casaburi & Ugo Troiano, 2015. "Ghost-House Busters: The Electoral Response to a Large Anti Tax Evasion Program," NBER Working Papers 21185, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:21185
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    JEL classification:

    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance

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