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Estimating Tax Agency Efficiency

Author

Listed:
  • James Alm

    () (Department of Economics, Tulane University)

  • Denvil Duncan

    () (School of Public and Environmental Affairs, Indiana University-Bloomington)

Abstract

Empirical work on a tax agency's production process has been plagued by the absence of comparable tax administrative data across countries and years. Such data are now available from the Organisation of Economic Co-operation and Development. This paper uses these data for the years 2007 to 2011, together with an estimation strategy that utilizes data envelopment analysis and stochastic frontier analysis, to determine the relative efficiency of tax agencies in their use of inputs. Overall, the average efficiency scores indicate that countries should be able to collect their current level of revenues with approximately 10 to 16 percent less inputs.

Suggested Citation

  • James Alm & Denvil Duncan, 2014. "Estimating Tax Agency Efficiency," Working Papers 1404, Tulane University, Department of Economics.
  • Handle: RePEc:tul:wpaper:1404
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    File URL: http://econ.tulane.edu/RePEc/pdf/tul1404.pdf
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    References listed on IDEAS

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    1. Maria Katharaki & Marios Tsakas, 2010. "Assessing the efficiency and managing the performance of Greek tax offices," Journal of Advances in Management Research, Emerald Group Publishing, vol. 7(1), pages 58-75, May.
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    3. Joshua Aizenman & Yothin Jinjarak, 2008. "The collection efficiency of the Value Added Tax: Theory and international evidence," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 17(3), pages 391-410.
    4. Glenn Rayp & Nicolas Van De Sijpe, 2007. "Measuring and explaining government efficiency in developing countries," Journal of Development Studies, Taylor & Francis Journals, vol. 43(2), pages 360-381.
    5. Balaguer-Coll, Maria Teresa & Prior, Diego & Tortosa-Ausina, Emili, 2007. "On the determinants of local government performance: A two-stage nonparametric approach," European Economic Review, Elsevier, vol. 51(2), pages 425-451, February.
    6. Antonis Adam & Manthos Delis & Pantelis Kammas, 2011. "Public sector efficiency: leveling the playing field between OECD countries," Public Choice, Springer, vol. 146(1), pages 163-183, January.
    7. Leslie Robinson & Joel Slemrod, 2012. "Understanding multidimensional tax systems," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 19(2), pages 237-267, April.
    8. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
    9. Bird, Richard M. & Martinez-Vazquez, Jorge & Torgler, Benno, 2008. "Tax Effort in Developing Countries and High Income Countries: The Impact of Corruption, Voice and Accountability," Economic Analysis and Policy, Elsevier, vol. 38(1), pages 55-71, March.
    10. Cook, Wade D. & Seiford, Larry M., 2009. "Data envelopment analysis (DEA) - Thirty years on," European Journal of Operational Research, Elsevier, vol. 192(1), pages 1-17, January.
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    Cited by:

    1. repec:lrk:eeaart:35_3_11 is not listed on IDEAS
    2. Jaime Bonet-Morón & Jhorland Ayala-García, 2016. "La brecha fiscal territorial en Colombia," DOCUMENTOS DE TRABAJO SOBRE ECONOMÍA REGIONAL Y URBANA 014561, BANCO DE LA REPÚBLICA - ECONOMÍA REGIONAL.
    3. Ибрагимова Найля Мурадовна, 2015. "Эмпирическая Оценка Эффективности Ндфл И Ндс В Узбекистане," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 19(1), pages 81-103.
    4. Jaime Bonet-Morón & Jhorland Ayala-García, 2017. "The Territorial Fiscal Gap in Colombia," Documentos de trabajo sobre Economía Regional y Urbana 251, Banco de la Republica de Colombia.
    5. Elena Villar Rubio & Pedro Enrique Barrilao González & Juan Delgado Alaminos, 2017. "Relative efficiency within a tax administration: The effects of result improvement," REVISTA FINANZAS Y POLÍTICA ECONÓMICA, UNIVERSIDAD CATOLICA DE COLOMBIA, vol. 9(1), pages 135-149, February.
    6. repec:bla:pacecr:v:22:y:2017:i:4:p:620-648 is not listed on IDEAS

    More about this item

    Keywords

    tax administration; tax efficiency; data envelopment analysis; stochastic frontier analysis;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H61 - Public Economics - - National Budget, Deficit, and Debt - - - Budget; Budget Systems
    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration

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