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Tax me, but spend wisely? Sources of public finance and government accountability
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Gadenne, Lucie (2017) Tax me, but spend wisely? Sources of public finance and government accountability. American Economic Journal : Applied Economics, 9 (1). pp. 274-314. doi:10.1257/app.20150509 ISSN 1945-7782.
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Official URL: https://doi.org/10.1257/app.20150509
Abstract
Existing evidence suggests that extra grant revenues lead to little improvements in public services in developing countries - but would governments spend tax revenues differently? This paper considers a program that invests in the tax capacity of Brazilian municipalities. Using variations in the timing of program uptake I find that it raises local tax revenues and that the increase in taxes is used to improve both the quantity and quality of municipal education infrastructure. In contrast increases in grants over which municipalities have the same discretion as over taxes have no impact on any measure of local public infrastructure. These results suggest that the way governments are financed matters: governments spend increases in tax revenues more towards expenditures that benefit citizens than increases in grant revenues.
Item Type: | Journal Article | ||||||
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Subjects: | H Social Sciences > HJ Public Finance | ||||||
Divisions: | Faculty of Social Sciences > Economics | ||||||
Library of Congress Subject Headings (LCSH): | Taxation -- Brazil, Government spending policy -- Brazil, Expenditures, Public -- Brazil, Education -- Economic aspects -- Brazil | ||||||
Journal or Publication Title: | American Economic Journal : Applied Economics | ||||||
Publisher: | American Economic Association | ||||||
ISSN: | 1945-7782 | ||||||
Official Date: | 1 January 2017 | ||||||
Dates: |
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Volume: | 9 | ||||||
Number: | 1 | ||||||
Page Range: | pp. 274-314 | ||||||
DOI: | 10.1257/app.20150509 | ||||||
Status: | Peer Reviewed | ||||||
Publication Status: | Published | ||||||
Access rights to Published version: | Restricted or Subscription Access | ||||||
Date of first compliant deposit: | 18 August 2016 | ||||||
Date of first compliant Open Access: | 18 August 2016 | ||||||
Funder: | AXA Group. Research Fund, CEPREMAP (Center) | ||||||
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