Tax Me, But Spend Wisely? Sources of Public Finance and Government Accountability

Lucie Gadenne

CAGE Online Working Paper Series from Competitive Advantage in the Global Economy (CAGE)

Abstract: Existing evidence suggests that extra grant revenues lead to little improvements in public services in developing countries - but would governments spend tax revenues di erently? This paper considers a program that invests in the tax capacity of Brazilian municipalities. Using variations in the timing of program uptake I nd that it raises local tax revenues and that the increase in taxes is used to improve both the quantity and quality of municipal education infrastructure. In contrast increases in grants over which municipalities have the same discretion as over taxes have no impact on any measure of local public infrastructure. These results suggest that the way governments are nanced matters: governments spend increases in tax revenues more towards expenditures that bene t citizens than increases in grant revenues.

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Date: 2016
New Economics Papers: this item is included in nep-pbe and nep-pub
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Citations: View citations in EconPapers (14)

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http://www2.warwick.ac.uk/fac/soc/economics/resear ... 289-2016_gadenne.pdf

Related works:
Journal Article: Tax Me, but Spend Wisely? Sources of Public Finance and Government Accountability (2017)
Working Paper: Tax Me, But Spend Wisely? Sources of Public Finance and Government Accountability (2016)
Working Paper: Tax Me, But Spend Wisely? Sources of Public Finance and Government Accountability (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:cge:wacage:289

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