Government, Taxation and Economic Complexity

Barros, Fernando; Brotherhood, Luiz; Gomes, Fabio  Augusto Reis; Rangel, Victor

doi:10.2139/ssrn.4724269

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Government, Taxation and Economic Complexity

10 Pages Posted: 11 Mar 2024

See all articles by Fernando Barros

Luiz Brotherhood

University of Barcelona; University of Barcelona - Barcelona Economic Analysis Team (BEAT)

Victor Rangel

Insper Institute of Education and Research

Date Written: February 13, 2024

Abstract

This paper investigates the relationship between tax complexity, economic complexity, and government size. The findings are obtained through cross-country panel data and two-way fixed effects regressions, and reveal a nuanced connection: under small (large) government scales, increased tax complexity is associated with greater (smaller) economic sophistication. This suggests that tax complexity’s positive and negative aspects vary depending on the government conditions provided to the economy.

Keywords: Economic Complexity, Tax Complexity, Government Size, Taxation

JEL Classification: H21, O39, M48

Suggested Citation: Suggested Citation

Barros, Fernando and Brotherhood, Luiz and Gomes, Fabio Augusto Reis and Rangel, Victor, Government, Taxation and Economic Complexity (February 13, 2024). Available at SSRN: https://ssrn.com/abstract=4724269 or http://dx.doi.org/10.2139/ssrn.4724269