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Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods

Bibek Adhikari () and James Alm ()

Southern Economic Journal, 2016, vol. 83, issue 2, 437-463

Abstract: Tax reforms are often motivated by their potential to improve economic performance. However, their actual impacts are difficult to quantify. We analyze the impact of flat tax reformon incomes using “synthetic control” methods. We identify the eight Eastern and Central European countries that adopted flat tax systems between 1994 and 2005, and then comparepost-reform GDP per capita of “treated” countries with a convex combination of similar but “untreated” countries, while accounting for the time-varying impact of unobservable heterogeneity. We find positive impacts in all eight countries, with seven out of eight cases significant atthe conventional level.

JEL-codes: H20 H25 H31 (search for similar items in EconPapers)
Date: 2016
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http://dx.doi.org/10.1002/soej.12152

Related works:
Working Paper: Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (2017) Downloads
Working Paper: Evaluating the Economic Effects of Flat Tax Reforms Using Synthetic Control Methods (2016) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:sej:ancoec:v:83:2:y:2016:p:437-463

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