The Political Economy of Imperfect Taxation and Sustainable Privatisation: When Do Countries Privatise and Who Gets the Spoils

DELTA Working Paper No. 2002-13

28 Pages Posted: 17 Nov 2004

See all articles by Rudiger Ahrend

Rudiger Ahrend

Centre for Entrepreneurship, SMEs, Regions and Cities

Carlos Winograd

École Normale Supérieure (ENS) - Department and Laboratory of Applied and Theoretical Economics (DELTA)

Date Written: February 2002

Abstract

This article investigates the connection between the apparently uncorrelated issues of tax evasion and privatisation. We first determine how the political process - given a country's level of development and income distribution - will determine the efficiency of its tax system. We then regard how the efficiency of taxation impacts on the outcome of privatisation attempts. We consider under which condition privatisation will proceed, and who will be the political supporters as well as the main winners of the privatisation process. Moreover we investigate the impact of different forms of corruption both on the initial public support for privatisation, as well as its long term political sustainability.

Keywords: Privatisation, Taxation, Political Economy, Corruption, Underpricing

JEL Classification: D72, D78, H21, H26

Suggested Citation

Ahrend, Rudiger and Winograd, Carlos, The Political Economy of Imperfect Taxation and Sustainable Privatisation: When Do Countries Privatise and Who Gets the Spoils (February 2002). DELTA Working Paper No. 2002-13, Available at SSRN: https://ssrn.com/abstract=620103 or http://dx.doi.org/10.2139/ssrn.620103

Rudiger Ahrend (Contact Author)

Centre for Entrepreneurship, SMEs, Regions and Cities ( email )

2 rue Andre Pascal
Paris, 75016
France
75016 (Fax)

Carlos Winograd

École Normale Supérieure (ENS) - Department and Laboratory of Applied and Theoretical Economics (DELTA) ( email )

48 boulevard Jourdan
75014 Paris
France

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