Tax evasion and government size: evidence from Italian provinces.

Autor: D'Agostino E; Department of Economics, University of Messina, Via dei Verdi, 75, 98122 Messina, Italy., De Benedetto MA; Department of Economics, Statistics and Finance, University of Calabria, Via Ponte Bucci, 87036 Arcavacata di Rende, CS Italy., Sobbrio G; Department of Economics, University of Messina, Via dei Verdi, 75, 98122 Messina, Italy.
Jazyk: angličtina
Zdroj: Economia politica (Bologna, Italy) [Econ Polit (Bologna)] 2021; Vol. 38 (3), pp. 1149-1187. Date of Electronic Publication: 2021 Apr 02.
DOI: 10.1007/s40888-021-00227-7
Abstrakt: We analyze the impact of government size, measured by total spending per capita, on tax evasion at the provincial level in Italy over the period 2001-2015. In order to solve endogeneity issues we rely on a system GMM and find that public expenditure negatively affects tax evasion, as taxpayers perceive the government is efficiently spending resources coming from the tax levy. Results are confirmed when we (1) consider expenditures related to long-term investments, namely capital spending per capita, and (2) directly test the impact of government efficiency on tax evasion. In addition, we show that the impact of public spending is heterogeneous across geographical areas: an increase in public expenditure leads to a downward shift in tax evasion only in the northern part of Italy, characterized by a relatively larger initial level of public goods provision.
Competing Interests: Conflict of interestThe authors declare that they have no conflict of interest.
(© The Author(s) 2021.)
Databáze: MEDLINE
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