Department of Economics
University of Warwick
Coventry CV4 7AL
Institutional Affiliation: Warwick University
Information about this author at RePEc
NBER Working Papers and Publications
|June 2020||Informality, Consumption Taxes, and Redistribution|
with Pierre Bachas, Anders Jensen: w27429
Can consumption taxes reduce inequality in developing countries? We combine household expenditure data from 31 countries with theory to shed new light on the redistributive potential and optimal design of consumption taxes. We use the type of store in which purchases occur to proxy for informal (untaxed) consumption. This enables us to characterize the informality Engel curve: we find that the budget share spent in the informal sector steeply declines with income, in all countries. The informal sector thus makes consumption taxes progressive: households in the richest quintile face an effective tax rate that is twice that of the poorest quintile. We extend the standard optimal commodity tax model to allow for informal consumption and calibrate it to the data to study the effects of differe...
|September 2013||Decentralization in Developing Economies|
with Monica Singhal: w19402
Standard models of fiscal federalism suggest many benefits of decentralization in developing economies, and there has been a recent push toward decentralization around the world. However, developing countries presently still have less decentralization, particularly on the revenue side, than both developed countries today and the United States and Europe historically. We consider how the trade-offs associated with fiscal federalism apply in developing countries and discuss reasons for their relatively low levels of decentralization. We also consider additional features relevant to federalism in developing economies, such as the prevalence of nongovernmental organizations and the role of social incentives in policy design.
Published: Singhal, Monica, and Lucie Gadenne. 2014. “Decentralization in Developing Economies.” Annual Review of Economics 6: 581-604. citation courtesy of