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The Politics of Tax Administration: Evidence from Spain

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  • Alejandro Esteller-More

    (University of Barcelona & Barcelona Institute of Economics)

Abstract

Does there exist a connection between the political power and the tax administration? In this paper, we offer empirical evidence from Spain that there exists. First, the Spanish regional tax administration is not immune to the budgetary situation of the regional government, and tends to exert a greater (lower) effort in tax collection as the (expected) public deficit is greater (lower). At the same time, the system of unconditional grants provokes an "income effect" that disincentives the efforts carried out by the tax administration. Second, when the margin to lose a parliamentary seat in an electoral district decreases, the efforts also diminish, though this disincentive is lessened according to the parliamentary strength of the incumbent (evidence of electoral competition).

Suggested Citation

  • Alejandro Esteller-More, 2003. "The Politics of Tax Administration: Evidence from Spain," Public Economics 0303004, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwppe:0303004
    Note: Type of Document - PDF; prepared on IBM PC - PC-TEX; to print on HP; pages: 31 ; figures: included
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    More about this item

    Keywords

    Tax Administration; Political Economy;

    JEL classification:

    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H72 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Budget and Expenditures
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism

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