Fiscal Reform and its Firm-Level Effects in Eastern Europe and Central Asia

John Anderson

No wp800, William Davidson Institute Working Papers Series from William Davidson Institute at the University of Michigan

Abstract: This paper reports the first empirical evidence that fiscal reform efforts in transition countries have positive effects. Using the EBRD BEEPS I and II data, reported in 1999 and 2002, rigorous econometric models are estimated showing that the share of bribes paid to tax collectors is reduced in countries with more extensive fiscal reforms. This effect controls for selection bias in the likelihood that firms are required to make unofficial payments to tax authorities. On the basis of this evidence, we now have some confidence in the success of fiscal reform efforts. In addition, we have insight regarding what forms of fiscal reform may be more successful as the share of revenues generated from direct taxes (both personal and corporate) has an impact on tax bribes.

Keywords: Fiscal reform; Bribery; Transition economies; Eastern Europe; Central Asia (search for similar items in EconPapers)
JEL-codes: C21 H25 O23 O52 (search for similar items in EconPapers)
Pages: pages
Date: 2005-08-01
New Economics Papers: this item is included in nep-acc, nep-dev, nep-pbe and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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