Joel Slemrod, Obeid Ur Rehman, Mazhar Waseem, 15 May 2019

Governments typically seek to reduce tax evasion by increasing the odds of catching tax evaders or by raising the punishments. Using social and psychological motivations may offer another approach to promoting tax compliance. This column analyses two Pakistani initiatives – public disclosure of income taxes and a recognition-and-rewards programme for top taxpayers – and shows that, to the extent that they are effective in influencing private and social behaviour, they potentially offer a cost-effective complement to standard tax-evasion measures. 

Uzma Afzal, Giovanna d’Adda, Marcel Fafchamps, Farah Said, 25 October 2018

Within households, an individual often makes consumption decisions for the collective. Leading intra-household decision making models predict efficiency based on perfect information about individuals’ preferences and benevolence. This column challenges these models by incorporating information asymmetry and demand for agency. Experimental evidence from Pakistan shows that household consumption decisions are shaped by a demand for agency, and that this is mediated by level of empowerment. 

Michael Callen, Saad Gulzar, Muhammad Yasir Khan, Ali Hasanain, 21 August 2016

Government employee absenteeism is often a serious problem in developing countries. One potential reason is government positions being appointed as a kind of patronage to reward political loyalty. This column presents the results of an intervention designed to address government doctor absenteeism in Punjab, Pakistan. The programme provided government inspectors with a smartphone app to streamline information flows, and improved inspection rates. The results support the political patronage hypothesis and provide encouraging support for data-driven policymaking.

Michael Best, Anne Brockmeyer, Henrik Kleven, Johannes Spinnewijn, Mazhar Waseem, 05 January 2016

Developing economies are characterised by low tax revenue and widespread tax evasion. This column assesses what tax policy instruments governments should use to raise revenue. Optimal tax policy in developing countries may diverge from what is prescribed in standard textbook models. A turnover tax, for instance, is known to distort production decisions but may also to be more difficult to evade than a profit tax, and so can be optimal in high-evasion contexts.

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