Laws consist of two components: the 'obligations' they express and the 'incentives' designed to enforce them.In this paper we run a public good experiment to test whether or not obligations have any independent effect on cooperation in social dilemmas.The results show that, for given marginal...

Informality is a wide-spread phenomenon across the globe. We show that firms in countries with better information sharing systems and greater financial sector outreach evade taxes to a lesser degree, an effect that is stronger for smaller firms, firms in smaller cities and towns, and firms in...

A common fraud by registered traders in the value-added tax system is under-reporting sales and over-reporting purchases. This paper models this problem by linking the level of misreporting to the risk-aversion of taxpayers and the level of transactions with final consumers. In addition, it...

Abstract: This paper models and empirically tests a self-enforcing feature of the value added tax (VAT) which is absent in the theory: An incentive that makes formal traders buy from suppliers who pay VAT too. In addition, it explores how the government can deploy this feature to enforce VAT...

The paper studies the revenue, efficiency, and distributional implications of a simple strategy of offsetting tariff reductions with increases in destination-based consumption taxes so as to leave consumer prices unchanged. We employ a dynamic micro-founded macroeconomic model of a small open...

Direct incentives and punishments are the most common instruments to fight tax evasion. The theoretical literature disregarded indirect schemes, such as itemised deductions, in which an agent has an interest in that other agents declare their revenue. Itemised deductions provide an incentive for...

We exploit detailed data on approved and rejected small business loans to assess the impact of the introduction of a credit registry in Bosnia and Herzegovina. Our findings are threefold. First, mandatory information sharing tightens lending at the extensive margin as more applications are...

Using a novel enterprise survey from Kenya (FinAccess Business), we document a strong positive association between the use of mobile money as a method to pay suppliers and access to trade credit. We develop a dynamic general equilibrium model with heterogeneous entrepreneurs, imperfect credit...

In this paper we document evidence of systemic risk taking from syndicated loan<br/>pricing. Using U.S. syndicated loan data, we find that the borrower's idiosyncratic risk is positively priced whereas systematic risk is negatively related to loan spreads, controlling for firm, loan and bank specific...

Since information asymmetries have been identified as an important source of bank profits, it may seem that the establishment of information sharing arrangements such as credit registers and bureaus will lead to lower investment in acquiring information. However, banks base their decisions on...