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Ghost-House Busters: The Electoral Response to a Large Anti Tax Evasion Program

59 Pages Posted: 28 Oct 2011 Last revised: 21 Jul 2015

Lorenzo Casaburi

Stanford Institute for Economic Policy Research

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: July 20, 2015

Abstract

The incentives of political agents to enforce tax collection are key determinants of the levels of compliance. We study the electoral response to the Ghost Buildings program, a nationwide anti tax evasion policy in Italy that used innovative monitoring technologies to target buildings hidden from tax authorities. The program induced monetary and non-monetary benefits for non-evaders and an increase in local government expenditures. A one standard deviation increase in town-level program intensity leads to a 4.8 percent increase in local incumbent reelection rates. In addition, these political returns are higher in areas with lower tax evasion tolerance and with higher efficiency of public good provision, implying complementarity among enforcement policies, the underlying tax culture, and the quality of the government.

Keywords: tax evasion, public economics, political economics

JEL Classification: H26, H71, D72, E62, O17, O38

Suggested Citation

Casaburi, Lorenzo and Troiano, Ugo, Ghost-House Busters: The Electoral Response to a Large Anti Tax Evasion Program (July 20, 2015). Available at SSRN: https://ssrn.com/abstract=1950473 or http://dx.doi.org/10.2139/ssrn.1950473

Lorenzo Casaburi (Contact Author)

Stanford Institute for Economic Policy Research ( email )

579 Serra Mall at Galvez St.
Stanford, CA 94305-6015
United States

Ugo Troiano

University of Michigan at Ann Arbor - Department of Economics ( email )

611 Tappan Street
Ann Arbor, MI 48109-1220
United States

HOME PAGE: http://sites.google.com/a/umich.edu/troiano

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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