The Politics of Tax Administration: Evidence from Spain

Alejandro Esteller-Moré ()

Public Economics from EconWPA

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).

Keywords: Tax Administration; Political Economy (search for similar items in EconPapers)
JEL-codes: H21 H72 H77 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eec and nep-geo
Date: 2003-03-20
Note: Type of Document - PDF; prepared on IBM PC - PC-TEX; to print on HP; pages: 31 ; figures: included
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwppe:0303004

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