Revealed Corruption, Taxation, and Fiscal Accountability: Evidence from Brazil

Jeffrey F. Timmons; Francisco Garfias

doi:10.1016/j.worlddev.2014.12.011

Revealed Corruption, Taxation, and Fiscal Accountability: Evidence from Brazil

Jeffrey F. Timmons, Francisco Garfias

Political Science

Research output: Contribution to journal › Article › peer-review

Abstract

Fiscal contract theories hypothesize that government performance affects tax collection and that institutions that foster representation and accountability link taxes and services. We use randomly generated municipal audit reports with objective measures of corruption from Brazil to assess whether new information about corruption affects municipal property tax collection and the structure of fiscal institutions. We find short-run effects consistent with this theory: property tax revenue rises with clean audit reports and falls as revealed corruption increases; furthermore revealed corruption increases the probability that a municipality adopts participatory budgeting. Our results indicate modest demand-side constraints on taxation and budgetary institutions.

Original language	English (US)
Pages (from-to)	13-27
Number of pages	15
Journal	World Development
Volume	70
DOIs	https://doi.org/10.1016/j.worlddev.2014.12.011
State	Published - Jun 1 2015

Keywords

Corruption
Fiscal contract
Participatory budgeting
Property taxes
Randomized audits

ASJC Scopus subject areas

Geography, Planning and Development
Development
Sociology and Political Science
Economics and Econometrics

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10.1016/j.worlddev.2014.12.011

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title = "Revealed Corruption, Taxation, and Fiscal Accountability: Evidence from Brazil",

abstract = "Fiscal contract theories hypothesize that government performance affects tax collection and that institutions that foster representation and accountability link taxes and services. We use randomly generated municipal audit reports with objective measures of corruption from Brazil to assess whether new information about corruption affects municipal property tax collection and the structure of fiscal institutions. We find short-run effects consistent with this theory: property tax revenue rises with clean audit reports and falls as revealed corruption increases; furthermore revealed corruption increases the probability that a municipality adopts participatory budgeting. Our results indicate modest demand-side constraints on taxation and budgetary institutions.",

keywords = "Corruption, Fiscal contract, Participatory budgeting, Property taxes, Randomized audits",

author = "Timmons, {Jeffrey F.} and Francisco Garfias",

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TY - JOUR

T1 - Revealed Corruption, Taxation, and Fiscal Accountability

T2 - Evidence from Brazil

AU - Timmons, Jeffrey F.

AU - Garfias, Francisco

PY - 2015/6/1

Y1 - 2015/6/1

N2 - Fiscal contract theories hypothesize that government performance affects tax collection and that institutions that foster representation and accountability link taxes and services. We use randomly generated municipal audit reports with objective measures of corruption from Brazil to assess whether new information about corruption affects municipal property tax collection and the structure of fiscal institutions. We find short-run effects consistent with this theory: property tax revenue rises with clean audit reports and falls as revealed corruption increases; furthermore revealed corruption increases the probability that a municipality adopts participatory budgeting. Our results indicate modest demand-side constraints on taxation and budgetary institutions.

AB - Fiscal contract theories hypothesize that government performance affects tax collection and that institutions that foster representation and accountability link taxes and services. We use randomly generated municipal audit reports with objective measures of corruption from Brazil to assess whether new information about corruption affects municipal property tax collection and the structure of fiscal institutions. We find short-run effects consistent with this theory: property tax revenue rises with clean audit reports and falls as revealed corruption increases; furthermore revealed corruption increases the probability that a municipality adopts participatory budgeting. Our results indicate modest demand-side constraints on taxation and budgetary institutions.

KW - Corruption

KW - Fiscal contract

KW - Participatory budgeting

KW - Property taxes

KW - Randomized audits

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SP - 13

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JO - World Development

JF - World Development

ER -

Revealed Corruption, Taxation, and Fiscal Accountability: Evidence from Brazil

Abstract

Keywords

ASJC Scopus subject areas

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