IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Log in (now much improved!) to save this paper

Tax Evasion, the Provision of Public Infrastructure, and Growth: A General Equilibrium Approach to Two Very Different Countries, Egypt and Mauritius

Listed author(s):
  • Andrew Feltenstein
  • Jeffrey Condon
  • Biplab Kumar Datta

TWe construct a dynamic multi-period general equilibrium model and use it to analyze prospects for growth in two very different countries, Egypt and Mauritius. The use of a single model has the advantage that when comparing alternative policies across countries, it is not necessary to worry if different conclusions are based solely upon model differences, as would be the case with multiple models. In the case of Egypt we look at the effects of the revolution of 2011 on growth, in particular, at the impact of a dramatic decline in tourism. In addressing the issue of how to increase growth we focus upon a particular problem in Egypt, namely the low rate of tax compliance. Accordingly, we look at fiscal policies designed to reduce tax evasion, and find that these policies are also successful in modestly increasing GDP growth. Mauritius has not suffered from any immediate shock, as has Egypt. However shortages in public infrastructure have been identified as bottlenecks in GDP growth, which has slowed in recent years. We therefore estimate elasticities of private production with respect to stocks of public infrastructure, and use these elasticities to implement our general equilibrium model. We find that modest increases in spending upon public infrastructure, compensated for by corresponding decreases in current spending, can lead to increases in real GDP growth. Beyond certain levels, however, more infrastructure spending will actually lead to a decline in real GDP growth.

If 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.

File URL: http://icepp.gsu.edu/files/2015/03/ispwp1425.pdf
Download Restriction: no

Paper provided by International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University in its series International Center for Public Policy Working Paper Series, at AYSPS, GSU with number paper1425.

as
in new window

Length: 51 pages
Date of creation: 09 Jun 2014
Handle: RePEc:ays:ispwps:paper1425
Contact details of provider: Phone: 404-413-0235
Fax: 404-413-0244
Web page: http://aysps.gsu.edu/isp/index.html

References listed on IDEAS
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.:

as
in new window


  1. Bandyopadhyay, Simanti & Rao, M. Govinda, 2009. "Fiscal health of selected Indian cities," Policy Research Working Paper Series 4863, The World Bank.
  2. Stavins, Robert N. & Wagner, Alexander F. & Wagner, Gernot, 2003. "Interpreting sustainability in economic terms: dynamic efficiency plus intergenerational equity," Economics Letters, Elsevier, vol. 79(3), pages 339-343, June.
  3. Lars-Erik Borge & Jan K. Brueckner & Jorn Rattso, 2012. "Partial Fiscal Decentralization and Public-Sector Heterogeneity: Theory and Evidence from Norway," CESifo Working Paper Series 3954, CESifo Group Munich.
  4. Kubiszewski, Ida & Costanza, Robert & Franco, Carol & Lawn, Philip & Talberth, John & Jackson, Tim & Aylmer, Camille, 2013. "Beyond GDP: Measuring and achieving global genuine progress," Ecological Economics, Elsevier, vol. 93(C), pages 57-68.
  5. Inman, Robert P, 1995. "How to Have a Fiscal Crisis: Lessons from Philadelphia," American Economic Review, American Economic Association, vol. 85(2), pages 378-383, May.
  6. Benjamin Dachis & William B.P. Robson, 2011. "Holding Canada's Cities to Account: an Assessment of Municipal Fiscal Management," C.D. Howe Institute Backgrounder, C.D. Howe Institute, issue 145, November.
  7. Jaime Vázquez-Caro & Richard M. Bird, 2011. "Benchmarking Tax Administrations in Developing Countries: A Systemic Approach," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1104, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
  8. Chernick, Howard & Langley, Adam & Reschovsky, Andrew, 2011. "The impact of the Great Recession and the housing crisis on the financing of America's largest cities," Regional Science and Urban Economics, Elsevier, vol. 41(4), pages 372-381, July.
  9. Howard Chernick & Adam Langley & Andrew Reschovsky, 2011. "Revenue Diversification in Large U.S. Cities," IMFG Papers 05, University of Toronto, Institute on Municipal Finance and Governance.
  10. 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.
  11. Dethier, Jean-Jacques & Morrill, Curtis, 2012. "The great recession and the future of cities," Policy Research Working Paper Series 6256, The World Bank.
  12. Enid Slack, 2006. "Cities in Canadian Federalism," International Tax Program Papers 0603, International Tax Program, Institute for International Business, Joseph L. Rotman School of Management, University of Toronto.
  13. Anderson, John E., 2012. "State Tax Rankings: What Do They and Don’t They Tell Us?," National Tax Journal, National Tax Association, vol. 65(4), pages 985-1010, December.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ays:ispwps:paper1425. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Benson)

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 references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.