Utilize este identificador para referenciar este registo: http://hdl.handle.net/10400.5/2615
Título: Excess burden and the cost of inefficiency in public services provision
Autor: Afonso, António
Gaspar, Vítor
Palavras-chave: Government efficiency
excess burden
taxes
spending
Data: 2006
Editora: ISEG – Departamento de Economia
Citação: Afonso, António e Vítor Gaspar. 2006. "Excess burden and the cost of inefficiency in public services provision". Instituto Superior de Economia e Gestão - DE Working papers nº 5-2006/DE/UECE
Relatório da Série N.º: DE Working papers;nº 5-2006/DE/UECE
Resumo: In this paper we revisit the literature on the economic consequences from inefficiency in public services provision. Following Dupuit (1844) and Pigou (1947) we argue that it is important to take the financing side explicitly into account. The fact that public expenditure financing must rely on distortional taxation implies that both direct and indirect costs are relevant when estimating the economic impacts of inefficiency in public services provision. Using Hicks' compensating variation (following Diamond and McFadden (1974) and Auerbach (1985)) we show that these magnification mechanisms are not only conceptually relevant, they are also important from a quantitative point of view. Specifically, we rely on a range of estimates of public sector efficiency (from Afonso, Schuknecht and Tanzi (2005, 2006)) to illustrate numerically that the relative importance of indirect costs of public sector provision inefficiency, linked to financing through distortional taxation increases with the magnitude of the inefficiency.
URI: http://hdl.handle.net/10400.5/2615
ISSN: 0874-4548
Versão do Editor: https://aquila1.iseg.utl.pt/aquila/getFile.do?method=getFile&fileId=26441
Aparece nas colecções:DE - Documentos de trabalho / Working Papers
UECE - Documentos de Trabalho / UECE - Working Papers

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