Template-Type: ReDIF-Paper 1.0
Author-Name: Chowdhury Mohammad Sakib Anwar
Author-Name-First: Chowdhury Mohammad Sakib
Author-Name-Last: Anwar
Author-Name: Alexander Matros
Author-Name-First: Alexander
Author-Name-Last: Matros
Author-Name: Sonali Sen Gupta
Author-Name-First: Sonali
Author-Name-Last: Sen Gupta
Title: Public Good Provision
Abstract: We develop a model that links tax evasion, corruption, and public good provision.<br/>In our model, citizens pay or evade taxes into the public fund, which a corrupt<br/>governor redistributes. Each citizen forms expectations about the amount of public goods the governor should provide. After observing the actual level of public goods, a citizen punishes the governor if this level is below his expectations.<br/>We describe three types of equilibria: tax evasion, efficient public good provision, and symmetric mixed-strategy. We show that the highest expectations can lead to no free riding (tax evasion) and the efficient level of public good provision even with the corrupt governor and without punishment for tax evasion.
Creation-Date: 2020
File-URL: http://www.lancaster.ac.uk/media/lancaster-university/content-assets/documents/lums/economics/working-papers/LancasterWP2020_012.pdf
File-Format: application/pdf
Number: 300159332
Classification-JEL: H40, D83, D73
Keywords: Tax evasion, Audits, Embezzlement, Corruption, Sanctions, Public goods
Handle: RePEc:lan:wpaper:300159332