Structural Tax Reforms and Public Spending Efficiency

Antonio Afonso, Joao Jalles and Ana Venâncio ()
Additional contact information
Ana Venâncio: ISEG, Universidade de Lisboa

Open Economies Review, 2021, vol. 32, issue 5, No 8, 1017-1061

Abstract: Abstract We empirically assess the effects of structural tax reforms on government spending efficiency in a sample of 18 OECD economies over the period 2006–2017. After calculating input spending efficiency scores, we evaluate in a panel setup the relevance for public sector efficiency of narrative tax changes. We find that: i) input efficiency scores average around 0.6–07; ii) increases in tax rates, primarily for PIT, negatively affect public sector efficiency; iii) controlling for endogeneity, increases in tax rates are still associated with lower public sector efficiency, mainly for PIT and increases in tax bases improve public sector efficiency; vi) in expansionary periods, increasing the CIT base and reducing PIT rates, positively affect public sector efficiency; ix) in contrast, during recessions efficiency improves when PIT and VAT bases increase and the CIT rate increases.

Keywords: Government spending efficiency; Tax reforms; Data envelopment analysis; Non-parametric estimation; Panel data; Political economy; C14; C23; H11; H21; H50 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
http://link.springer.com/10.1007/s11079-021-09644-4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Structural Tax Reforms and Public Spending Efficiency (2020)
Working Paper: Structural Tax Reforms and Public Spending Efficiency (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:openec:v:32:y:2021:i:5:d:10.1007_s11079-021-09644-4

Ordering information: This journal article can be ordered from
http://www.springer. ... cs/journal/11079/PS2

DOI: 10.1007/s11079-021-09644-4

Access Statistics for this article

Open Economies Review is currently edited by G.S. Tavlas

More articles in Open Economies Review from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().