Bureaucracy and Corruption Taxation Proof
AbstractUsing the Principal-Agent-Supervisor paradigm, we examine in this paper how a tax collection agency changes optimal schemes in order to lessen the occurrence of bribery between the tax collector and the taxpayer. The Principal, who maximizes the expected net fiscal revenue, reacts by decreasing tax rates when the supervisor is likely to engage in corrupt transaction with taxpayer. The combat against collusion may explain the greater reliance on indirect taxes than on direct taxes both in developed and developing countries
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17177.
Date of creation: 05 Sep 2009
Date of revision:
Principal Agent Supervisor; Bureaucracy ; Collusion; Tax evasion;
Find related papers by JEL classification:
- D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion
This paper has been announced in the following NEP Reports:
- NEP-ACC-2009-09-19 (Accounting & Auditing)
- NEP-ALL-2009-09-19 (All new papers)
- NEP-CTA-2009-09-19 (Contract Theory & Applications)
- NEP-PBE-2009-09-19 (Public Economics)
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