Informal Taxation

Benjamin Olken and Monica Singhal

Scholarly Articles from Harvard Kennedy School of Government

Abstract: Informal payments are a frequently overlooked source of local public finance in developing countries. We use microdata from ten countries to establish stylized facts on the magnitude, form, and distributional implications of this "informal taxation." Informal taxation is wide- spread, particularly in rural areas, with substantial in-kind labor payments. The wealthy pay more, but pay less in percentage terms, and informal taxes are more regressive than formal taxes. Failing to include informal taxation underestimates household tax burdens and revenue decentralization in developing countries. We discuss various explanations for and implications of these observed stylized facts.

Date: 2011
New Economics Papers: this item is included in nep-iue, nep-pbe and nep-pub
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Citations: View citations in EconPapers (7)

Published in American Economic Journal: Applied Economics

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Related works:
Journal Article: Informal Taxation (2011)
Working Paper: Informal Taxation (2009)
Working Paper: Informal Taxation (2009)
Working Paper: Informal Taxation (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hrv:hksfac:5689166

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