Rosaria Vega Pansini

The Economic Crisis: Did Financial Supervision Matter?

The Asian financial crisis marked the beginning of worldwide efforts to improve the effectiveness of financial supervision. However, the crisis that started in 2007–08 was a crude awakening: several of these improvements seemed unable to avoid or mitigate the crisis. This paper brings the first systematic analysis of the role of two of these efforts - modifications in the architecture of financial supervision and in supervisory governance - and concludes that they were negatively correlated with economic resilience. Using the emerging distinction between macro- and micro-prudential supervision, we explore to what extent two separate institutions would allow for more checks and balances to improve supervisory governance and, thus, reduce the probability of supervisory failure.

EXTENSIONS TO THE MULTIPLIER DECOMPOSITION APPROACH IN A SAM FRAMEWORK: AN APPLICATION TO VIETNAM

The aim of this paper is to provide an extension of a technique recently introduced by Pyatt and Round (2006) to decompose each element of the ‘global multiplier matrix’ in ‘microscopic detail’ in order to capture the linkages between each household groups’ income and the exogenously injected income of other accounts. The methodology we propose allows dividing the impact of exogenous injections into four different effects: direct-direct effect (D-D); direct-indirect effect (D-I); indirect-direct effect (I-D) and indirect-indirect effect (I-I). Results using the 2000 Vietnamese SAM show that the highest direct effects on the income of household groups are related to exogenous injections into the agricultural sector, while the highest indirect effects result from investing in other agriculture-related sectors such as, for example, food processing. Policy interventions focusing on the agricultural sector and on rural households will thus have the greatest effect on reducing the level of income inequality.

Regional tax evasion and audit enforcement

ABSTRACT Regional tax evasion and audit enforcement. Regional Studies. Using an original panel dataset on tax gap and audits, this paper sheds light on the impact of audit and enforcement on the Italian regional tax evasion over the period 2001–11. Spatial econometric models were used to model regional tax gaps and to control for endogeneity issues and spatial patterns. Results provide evidence that greater enforcement increases tax compliance. A higher probability of targeted audits and additional schemes to increase the disclosure of declared income decrease the tax gap. The paper provides a general framework to study determinants of tax evasion at the regional level.

Government, Central Bank and Banking Supervision Reforms: Does Independence Matter?

We empirically investigate whether central bank independence (CBI) and the monetary policy setting can jointly influence the likelihood that policymakers assign banking supervision to central banks. We find that, conditional on the government being a benevolent one, higher central bank operational freedom (economic independence) is associated with a reduced degree of supervisory powers. We motivate this with the possibility that governments fear the risk of a discretionary misuse of monetary tools. However, it turns that having tight monetary policy goals(a specific form of political independence) increases the odds of a central bank involvement in supervision. Our interpretation is that this may represent a commitment device mitigating the risk of central bank discretion in monetizing financial distress. Our study suggests that CBI can be relevant, not only for the alleged beneficial effects on macroeconomic variables, but also in influencing policymakers’ decisions in terms of banking supervision.

Spatial Dynamic Modelling of Tax Gap: the Case of Italy

Abstract This paper analyses the determinants of regional tax gap in Italy testing if tax evasion is characterised by spatial persistence. The size of spatial correlation in regional tax gaps has been tested and the role of additional determinants of evasion over the period 2001-2011 has been estimated. Using a dynamic spatial panel model, it is shown that regional tax gap is determined by tax evasion in neighbouring regions and is characterised by spatial persistence. Results make it possible to draw a taxonomy of the determinants of regional tax gap: contextual factors and operational factors linked to the relative efficacy of tax evasion contrasting policies and geography.

Bon Sauvage or Homo Homini Lupus? Evidence from European Social Survey 2006

The paper aims at investigating the linkages between civic awareness and subjective well-being in EU countries by using ESS (European Social Survey) 2006 data. In our analysis, civic awareness is measured using an original empirical approach based on factor analysis and the aggregation of a wide set of variables indicating the degree of individual’s involvement in civic participation of her/his community’s life. An ordered probit model is then ran using as dependent variable the question on subjective well-being while, on the other side, an OLS is estimated to investigate determinants of civic culture. The same set of regressors is used. Result evidentiate a robust correlation between the two dimensions of well-being.