Uncertainty in the Theory of Public Finance

Sandmo, Agnar

doi:10.2139/ssrn.1554894

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Uncertainty in the Theory of Public Finance

NHH Dept. of Economics Discussion Paper No. 14/2009

23 Pages Posted: 19 Feb 2010

See all articles by Agnar Sandmo

Agnar Sandmo

Norwegian School of Economics (NHH); Norwegian School of Economics (NHH) - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 2009

Abstract

This paper discusses the role that the economics of uncertainty has played in the theory of public finance. From being mostly concerned with its choice-theoretic foundations in the 1950s and ‘60s, the theory of expected utility maximization and risk averse behaviour has contributed decisively to the development of several areas of the theory of public finance. Three of these have been chosen here to illustrate the general point: Taxation and risk taking, the role of uncertainty in public expenditure and the theory of tax evasion and compliance.

JEL Classification: D8, H24, H26, H4

Suggested Citation: Suggested Citation

Sandmo, Agnar, Uncertainty in the Theory of Public Finance (September 2009). NHH Dept. of Economics Discussion Paper No. 14/2009, Available at SSRN: https://ssrn.com/abstract=1554894 or http://dx.doi.org/10.2139/ssrn.1554894