We first construct a theoretical model of tax evasion in a stylized developing country in which all taxpayers have either high or low income. The key problem is that the high income taxpayers may under report their income. An individual income tax return can only be verified with an audit that...

We study two issues relating to the conduct of environmental policy in developing countries (DCs). First, when faced with a self-financing constraint, should an environmental authority (EA) raise/lower pollution taxes over time or should it run a deficit/surplus? Second, given recent findings...

We first review the literature relating to the protection of the modern sector in developing countries (DCs). We then discuss the connections between protection, economic dualism, and optimal environmental policy in DCs. Next, we construct an intertemporal model of the environmental policy...