دانلود مقاله ISI انگلیسی شماره 5299
عنوان فارسی مقاله

بررسی فرار امالیاتی در زمینه عدم اطمینان سیاسی

کد مقاله سال انتشار مقاله انگلیسی ترجمه فارسی تعداد کلمات
5299 2013 14 صفحه PDF سفارش دهید 10120 کلمه
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عنوان انگلیسی
Exploring tax evasion in the context of political uncertainty
منبع

Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)

Journal : Economic Systems, Volume 37, Issue 2, June 2013, Pages 141–154

کلمات کلیدی
- فرار از پرداخت مالیات - عدم اطمینان سیاسی - عدم قطعیت اقتصادی - عدم قطعیت سیاست - اقتصادهای در حال گذار -
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چکیده انگلیسی

We present a model of agents facing the uncertainty of two future forms of government who are able to insure against this uncertainty by hiding funds from taxation. In order to choose whether or not to hide funds from taxation, agents need to know policy choices that each government would make should it come to power. But each government, before it could make its decision, would need to know the choices of the agents who would, for example, produce tax revenues. This informational tension is resolved endogenously. We derive the resulting level of tax evasion in society and the optimal choices made by the potential governments. We examine how changes in governmental structure would affect the level of tax evasion, and how that, in turn, would affect a particular form of capital flight.

مقدمه انگلیسی

Between 1990 and winter 2011, thirty-nine incumbents were replaced in a total of fifty-two elections in the eight Central Eastern European countries that joined the European Union in 2004.2 These frequent electoral changes, often bringing reversals in ideological orientations, created a climate of political instability, as they often resulted in governments pursuing different social and economic policies than their predecessors.3 Evidence that economic policy changes have an impact on business decision makers can be found, for example, in the BEEPS II data base. Turning to the broader group of twenty-six economies in transition covered in this study, hundreds of respondents from each of these countries were asked many questions, including the following: How great an obstacle to the operation and growth of your business is economic policy uncertainty? In twenty-two of those countries, more than fifty percent of the respondents stated that economic policy uncertainty was either a moderate or a major obstacle to the operation and growth of their business.4 Of course, the post-Soviet-type economies in transition do not have a monopoly on political uncertainty. In Western Europe, for example, incumbents in Portugal, Spain, France and Greece, to note only four, were even more recently replaced. Indeed, according to a recent paper by Baker et al. (2012), who construct several novel indices of policy uncertainty, policy uncertainty is responsible for a growing proportion of the more general category of economic uncertainty.5 Their paper also documents that U.S. policy uncertainty increases at moments of federal elections. Clearly, at most election moments in most countries, there is uncertainty about the policies of the government that will emerge as the victor. In the post-communist period, however, both political instability and divergent ideologies were pervasive features of the economies in transition, and it is for this reason that we set our problem in their context, although the implications of our analysis are applicable more generally. All the economies in transition suffered immediate drops in output, with real GDP falling for all of them until 1994. Furthermore, only three countries (Poland, Slovenia and Slovakia) had equal or higher real GDP in 1999 than they did in 1989.6 The recognition that the economies in transition had outdated capital stocks and production methods, and needed thorough redesign in every area, e.g. economic, legal, political, suggests the scope of the problem that any government in that group of countries had to confront. With no recent tradition of democratic government, and in some cases no tradition of democratic government at all, and with the opportunism that the turmoil and early privatization efforts created, it is not surprising that some of the new governments were more benevolent and focused on improving their countries and others were not. It is in this context that the role of uncertainty becomes especially important to agents in the economies in transition. The uncertainty concerning the various possible future policy choices of the government not only affected the economic decisions of the agents, but also created political pressures in support of different governments. Also during this time, and as a consequence of agents’ economic decisions, the economies in transition exhibited generally heightened, albeit varying, levels of tax evasion as well as capital flight. Because of the policy uncertainty during this period, agents were forced to make decisions in the absence of knowing whether the next government would be more or less benevolent, more or less democratic, more or less corrupt, or more or less able and willing to pursue economic growth and infrastructure development. How would economic agents in an economy in transition have dealt with the significant economic policy uncertainty that they faced? Would this policy uncertainty have induced acts by these agents that would have undermined or impeded the development of stable market-oriented democracies? In this paper, we attempt to answer these questions by investigating the degree to which uncertainty concerning future governmental policy induces tax evasion on the part of agents and how this, in turn, has an impact on economic development. In our model we imagine agents in a country in an early stage of transition from a planned to a market economy and suppose the transfer of property rights, once held by the state, has already occurred. However, the transition is still in progress, and the nature of the government's future policies is unknown to the agents. In particular, we assume that the agents believe that, due to a variety of reasons, the present government may evolve into either a benevolent government or a corrupt government. Each agent is forced to make economic decisions relating to his firm prior to the knowledge of which government will come into existence. The agent must choose whether or not to shelter some of the firm's funds out of the reach of the tax authorities to compensate for the uncertainty he faces. In choosing whether or not to hide funds from taxation, and how much to hide, the agent needs certain information. We assume that the agent needs to know, among other things, the probability that each government would come into existence and what each of the governments would do if it did come into existence. Knowing these things, each agent makes his economic choice, and collectively these choices yield both the tax revenue that would go to the ensuing government, and the level of tax evasion, denoted by the proportion of agents who hide funds from taxation. On the other hand, agents believe that each government, should it come into existence, will optimize its own objectives. These objectives may depend on the level of tax evasion and will be limited by the tax revenues provided by the agents. However, the level of tax evasion itself will be affected by the decisions of the ensuing government. Thus, the agents need the governments’ decisions to solve their problems and the governments need the agents’ decisions to solve their problems. The tension between the agents and governments is resolved by endogenizing the probabilities that each government will come into existence, thus bringing these two sets of decisions into accordance. The result of the equilibrium is to produce the level of tax evasion in the society and, should the benevolent government come into existence, the optimal level of investment in infrastructure this government would choose. To investigate some policy implications of our model, we next explore the impact of changes in the model's parameters on the level of tax evasion and the benevolent government's investment in infrastructure. We then define a specific type of capital flight within the context of our model and show how it would be affected by changes in the model's parameters. In the context of the literature on the rule of law in transition economies, most models investigating the decisions of agents in transition economies to steal start with a benchmark case in which the agents face a known type of government. The agent optimizes given the existing government, and then the problem is re-solved under the assumption of a different form of government. The agents’ decisions in the two situations are then compared. Although agents make decisions in two different contexts, there is no self-awareness on the part of the agents that the government might be of different types. Examples of studies in this tradition include Polishchuk and Savvateev (2004), Roland and Verdier (2003), Sonin (2003), and Katz and Owen (2009). A particular type of government, known to the agents, is also assumed in Grossman (1995) and Alexeev et al. (2004), who focus on “mafias” competing with the state for entrepreneurial rents. Dixit (2004), who suggests a principal-agent model to capture the intent of a government to induce efficiency in society, also assumes a given governmental form, known to the agents. Hoff and Stiglitz (2004) take a different tack by assuming agents face uncertainty regarding the form of government that will arise. They endogenize the probability of occurrence of these governments using a consistency requirement among the agents, and find that the uncertainty of governmental form leads to multiple solutions for the crime level. In their model the agents do not consider an active government in making their choices. We contribute to the literature on the rule of law in transition by considering the impact of political uncertainty on tax evasion in a broader context than the literature mentioned above. The considerations that the agents face in our model include not only the uncertainty of the future form of government, but also the awareness that their collective decisions have an impact on which government will come into existence, and also on what each government would do if it did come into existence. Taking these awarenesses into account, we derive the level of tax evasion resulting from them. We further examine how changes in this level of tax evasion would be affected by changes in the parameters describing these governments. This leads us to offer certain policy suggestions. We are also able to investigate how changes in a particular type of capital flight would relate to changes in the parameters. We also contribute to the literature on the role of institutions in transition (for example, Djankov and Murrell, 2002, McMillan, 2002 and Bevan and Estrin, 2004), and to that stressing the importance of institutional arrangements (for example, Shleifer and Vishny, 1998, Acemoglu et al., 2001, Acemoglu et al., 2002 and Acemoglu et al., 2003). We add to this literature by showing that different economic outcomes are to be expected when we allow agents to make choices in the face of the uncertainty as to which institutional arrangements will prevail. We present our model in Section 2. In Section 3 we discuss our results and offer our conclusions

نتیجه گیری انگلیسی

Between 1990 and winter 2011, thirty-nine incumbents were replaced in a total of fifty-two elections in the eight Central Eastern European countries that joined the European Union in 2004.2 These frequent electoral changes, often bringing reversals in ideological orientations, created a climate of political instability, as they often resulted in governments pursuing different social and economic policies than their predecessors.3 Evidence that economic policy changes have an impact on business decision makers can be found, for example, in the BEEPS II data base. Turning to the broader group of twenty-six economies in transition covered in this study, hundreds of respondents from each of these countries were asked many questions, including the following: How great an obstacle to the operation and growth of your business is economic policy uncertainty? In twenty-two of those countries, more than fifty percent of the respondents stated that economic policy uncertainty was either a moderate or a major obstacle to the operation and growth of their business.4 Of course, the post-Soviet-type economies in transition do not have a monopoly on political uncertainty. In Western Europe, for example, incumbents in Portugal, Spain, France and Greece, to note only four, were even more recently replaced. Indeed, according to a recent paper by Baker et al. (2012), who construct several novel indices of policy uncertainty, policy uncertainty is responsible for a growing proportion of the more general category of economic uncertainty.5 Their paper also documents that U.S. policy uncertainty increases at moments of federal elections. Clearly, at most election moments in most countries, there is uncertainty about the policies of the government that will emerge as the victor. In the post-communist period, however, both political instability and divergent ideologies were pervasive features of the economies in transition, and it is for this reason that we set our problem in their context, although the implications of our analysis are applicable more generally. All the economies in transition suffered immediate drops in output, with real GDP falling for all of them until 1994. Furthermore, only three countries (Poland, Slovenia and Slovakia) had equal or higher real GDP in 1999 than they did in 1989.6 The recognition that the economies in transition had outdated capital stocks and production methods, and needed thorough redesign in every area, e.g. economic, legal, political, suggests the scope of the problem that any government in that group of countries had to confront. With no recent tradition of democratic government, and in some cases no tradition of democratic government at all, and with the opportunism that the turmoil and early privatization efforts created, it is not surprising that some of the new governments were more benevolent and focused on improving their countries and others were not. It is in this context that the role of uncertainty becomes especially important to agents in the economies in transition. The uncertainty concerning the various possible future policy choices of the government not only affected the economic decisions of the agents, but also created political pressures in support of different governments. Also during this time, and as a consequence of agents’ economic decisions, the economies in transition exhibited generally heightened, albeit varying, levels of tax evasion as well as capital flight. Because of the policy uncertainty during this period, agents were forced to make decisions in the absence of knowing whether the next government would be more or less benevolent, more or less democratic, more or less corrupt, or more or less able and willing to pursue economic growth and infrastructure development. How would economic agents in an economy in transition have dealt with the significant economic policy uncertainty that they faced? Would this policy uncertainty have induced acts by these agents that would have undermined or impeded the development of stable market-oriented democracies? In this paper, we attempt to answer these questions by investigating the degree to which uncertainty concerning future governmental policy induces tax evasion on the part of agents and how this, in turn, has an impact on economic development. In our model we imagine agents in a country in an early stage of transition from a planned to a market economy and suppose the transfer of property rights, once held by the state, has already occurred. However, the transition is still in progress, and the nature of the government's future policies is unknown to the agents. In particular, we assume that the agents believe that, due to a variety of reasons, the present government may evolve into either a benevolent government or a corrupt government. Each agent is forced to make economic decisions relating to his firm prior to the knowledge of which government will come into existence. The agent must choose whether or not to shelter some of the firm's funds out of the reach of the tax authorities to compensate for the uncertainty he faces. In choosing whether or not to hide funds from taxation, and how much to hide, the agent needs certain information. We assume that the agent needs to know, among other things, the probability that each government would come into existence and what each of the governments would do if it did come into existence. Knowing these things, each agent makes his economic choice, and collectively these choices yield both the tax revenue that would go to the ensuing government, and the level of tax evasion, denoted by the proportion of agents who hide funds from taxation. On the other hand, agents believe that each government, should it come into existence, will optimize its own objectives. These objectives may depend on the level of tax evasion and will be limited by the tax revenues provided by the agents. However, the level of tax evasion itself will be affected by the decisions of the ensuing government. Thus, the agents need the governments’ decisions to solve their problems and the governments need the agents’ decisions to solve their problems. The tension between the agents and governments is resolved by endogenizing the probabilities that each government will come into existence, thus bringing these two sets of decisions into accordance. The result of the equilibrium is to produce the level of tax evasion in the society and, should the benevolent government come into existence, the optimal level of investment in infrastructure this government would choose. To investigate some policy implications of our model, we next explore the impact of changes in the model's parameters on the level of tax evasion and the benevolent government's investment in infrastructure. We then define a specific type of capital flight within the context of our model and show how it would be affected by changes in the model's parameters. In the context of the literature on the rule of law in transition economies, most models investigating the decisions of agents in transition economies to steal start with a benchmark case in which the agents face a known type of government. The agent optimizes given the existing government, and then the problem is re-solved under the assumption of a different form of government. The agents’ decisions in the two situations are then compared. Although agents make decisions in two different contexts, there is no self-awareness on the part of the agents that the government might be of different types. Examples of studies in this tradition include Polishchuk and Savvateev (2004), Roland and Verdier (2003), Sonin (2003), and Katz and Owen (2009). A particular type of government, known to the agents, is also assumed in Grossman (1995) and Alexeev et al. (2004), who focus on “mafias” competing with the state for entrepreneurial rents. Dixit (2004), who suggests a principal-agent model to capture the intent of a government to induce efficiency in society, also assumes a given governmental form, known to the agents. Hoff and Stiglitz (2004) take a different tack by assuming agents face uncertainty regarding the form of government that will arise. They endogenize the probability of occurrence of these governments using a consistency requirement among the agents, and find that the uncertainty of governmental form leads to multiple solutions for the crime level. In their model the agents do not consider an active government in making their choices. We contribute to the literature on the rule of law in transition by considering the impact of political uncertainty on tax evasion in a broader context than the literature mentioned above. The considerations that the agents face in our model include not only the uncertainty of the future form of government, but also the awareness that their collective decisions have an impact on which government will come into existence, and also on what each government would do if it did come into existence. Taking these awarenesses into account, we derive the level of tax evasion resulting from them. We further examine how changes in this level of tax evasion would be affected by changes in the parameters describing these governments. This leads us to offer certain policy suggestions. We are also able to investigate how changes in a particular type of capital flight would relate to changes in the parameters. We also contribute to the literature on the role of institutions in transition (for example, Djankov and Murrell, 2002, McMillan, 2002 and Bevan and Estrin, 2004), and to that stressing the importance of institutional arrangements (for example, Shleifer and Vishny, 1998, Acemoglu et al., 2001, Acemoglu et al., 2002 and Acemoglu et al., 2003). We add to this literature by showing that different economic outcomes are to be expected when we allow agents to make choices in the face of the uncertainty as to which institutional arrangements will prevail. We present our model in Section 2. In Section 3 we discuss our results and offer our conclusions

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