Silvia Fedeli

Joint income-tax and VAT-chain evasion

Abstract We consider joint income-tax evasion and VAT-chain evasion, acknowledging that decisions are not taken by agents in isolation, but result from negotiation between purchasers and suppliers in the chain of exchanges from producers/importers to final consumers. We establish outcomes in terms of Nash-bargaining-equilibria, and show that the greatest evasion is at the last stage of the chain. We then consider strategies that either recover lost revenues or deter tax evasion of all taxpayers in the chain.

Competing bureaus and politicians: A compliance approach to the diversion of public funds

This article analyzes the effects of the compliance relationship between the governing party and two competing bureaus producing differentiated goods. We assume that the three players simultaneously and independently take their decision in terms of production and rents with perfect knowledge of each others strategies. Unlike Niskanens competitive results, which are invariant with respect to the monopoly solution and only depend on the characteristics of the review process, here the budgetary equilibrium changes depending on the nature of the goods supplied by the competing bureaus and is affected both by their demand and cost conditions and by the resources available to the governing party.

A Game Theoretic Approach to Cross-Border VAT Evasion within EU Member States and its Relationship with the Black Economy

The interruption of the VAT chain at national borders makes several types of tax fraud possible. One is the multi stages black VAT chain in the domestic markets of various countries, which facilitates the development of a black economy favouring the evasion of income tax, social security contributions and other market regulations, including the protection of intellectual property and of brands. We devise a stylised model of Nash equilibrium-black chain for the “VAT-free goods”, depicting its effects on both market prices and illegal gains for fraudsters. The policy implications of the model aiming to contrast the black economy are analysed.

Public Co-Financing of Private Sector's Investments: Subsidiarity and Corruption

The literature on corruption makes unclearpredictions on the relations betweensubsidiarity principle, according to whichpublic decisions should be done at thelower level government possible, andcorruption of public officials. In thispaper, we compare two alternative regimes,centralised vs. decentralised, forthe public co-financing of privateprojects. We show that, in the absence ofcorruption, the two regimes give the same results. Borrowing from the Chamberlins analysis ofmonopolistic competition and from therent-seeking literature, we introducecorruption in the model as a selling costfor the private suppliers. We show that acentralized regime causes higher corruptionlevels because of the higher number ofprivate suppliers of competing projects. Asa result, a central government tends tohave a higher level of public capitalexpenditure than two (equally corruptible)regional governments.

Higher education as private good and as quasi public good: the case of Italy

This extensive book explores in detail a wide range of topics within the public choice and constitutional political economy tradition, providing a comprehensive overview of current work across the field.