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Administrative Costs and the "Double Dividend"


  • Knud Jørgen Munk


The view of economists seems in general to be that a green tax reform is unlikely to be associated with a "double dividend", especially if the policies prior to the reform have been economically rational. However, the results derived in the present paper suggest that this view needs to be qualified. We demonstrate that a green tax reform is likely to be associated with a significant "double dividend" if prior to the changes, which justify the green tax reform, it has been rational for the government to adopt a proportional tax system due to the administrative costs involved in differentiating commodity tax rates, and if the green tax reform stimulates the labour supply and has desirable income distributional effects

Suggested Citation

  • Knud Jørgen Munk, "undated". "Administrative Costs and the "Double Dividend"," EPRU Working Paper Series 00-06, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
  • Handle: RePEc:kud:epruwp:00-06

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    Cited by:

    1. Knud Munk, "undated". "Assessment of the Introduction of Road Pricing Using a Computable General Equilibrium Model," Regional and Urban Modeling 283600065, EcoMod.
    2. MUNK Knud, "undated". "Administrative Costs and Optimal Diversions from Free Trade in a Small Open Economy," EcoMod2003 330700108, EcoMod.

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