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Public Good Provision


  • Chowdhury Mohammad Sakib Anwar
  • Alexander Matros
  • Sonali Sen Gupta


We develop a model that links tax evasion, corruption, and public good provision. In our model, citizens pay or evade taxes into the public fund, which a corrupt governor redistributes. Each citizen forms expectations about the amount of public goods the governor should provide. After observing the actual level of public goods, a citizen punishes the governor if this level is below his expectations. We describe three types of equilibria: tax evasion, efficient public good provision, and symmetric mixed-strategy. We show that the highest expectations can lead to no free riding (tax evasion) and the efficient level of public good provision even with the corrupt governor and without punishment for tax evasion.

Suggested Citation

  • Chowdhury Mohammad Sakib Anwar & Alexander Matros & Sonali Sen Gupta, 2020. "Public Good Provision," Working Papers 300159332, Lancaster University Management School, Economics Department.
  • Handle: RePEc:lan:wpaper:300159332

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    References listed on IDEAS

    1. Andreoni, James & Bergstrom, Ted, 1996. "Do Government Subsidies Increase the Private Supply of Public Goods?," Public Choice, Springer, vol. 88(3-4), pages 295-308, September.
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    6. Allingham, Michael G. & Sandmo, Agnar, 1972. "Income tax evasion: a theoretical analysis," Journal of Public Economics, Elsevier, vol. 1(3-4), pages 323-338, November.
    7. Eric Avis & Claudio Ferraz & Frederico Finan, 2018. "Do Government Audits Reduce Corruption? Estimating the Impacts of Exposing Corrupt Politicians," Journal of Political Economy, University of Chicago Press, vol. 126(5), pages 1912-1964.
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    Cited by:

    1. Banerjee, Ritwik & Boly, Amadou & Gillanders, Robert, 2022. "Anti-tax evasion, anti-corruption and public good provision: An experimental analysis of policy spillovers," Journal of Economic Behavior & Organization, Elsevier, vol. 197(C), pages 179-194.

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    More about this item


    Tax evasion; Audits; Embezzlement; Corruption; Sanctions; Public goods;
    All these keywords.

    JEL classification:

    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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