Taxation, Social Protection, and Governance Decentralization

Gil Epstein and Ira Gang

No 11148, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Governments do not have perfect information regarding constituent priorities and needs. This lack of knowledge opens the door for groups to lobby in order to affect the government's taxation levels. We examine the political economy of decentralized revenue-raising authority in light of social protection expenditures by constructing a theoretical model of hierarchical contests and comparing the implications of centralized with decentralized governance. Increasing information available to the government may generate additional expenditures by interest groups trying to affect government taxation decisions. We show the potential existence of a poverty trap as a result of decentralization in taxation decisions.

Keywords: contests; economic models of political processes; governance; decentralization; intergovernmental relations; rentseeking (search for similar items in EconPapers)
JEL-codes: D72 H73 H77 (search for similar items in EconPapers)
Pages: 25 pages
Date: 2017-11
New Economics Papers: this item is included in nep-pbe and nep-pub
References: Add references at CitEc
Citations:

Published - published as 'Taxation and social protection under governance decentralisation' in: European Journal of Political Economy, 2019, 60, 101743

Downloads: (external link)
https://docs.iza.org/dp11148.pdf (application/pdf)

Related works:
Working Paper: Taxation, social protection, and governance decentralization (2017)
Working Paper: Taxation, social protection, and governance decentralization (2017)
Working Paper: Taxation, social protection, and governance decentralization (2016)
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:iza:izadps:dp11148

Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany

Access Statistics for this paper

More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().