Privatization has been a popular strategy for improving efficiency in both market and transition economies. The literature on privatization includes broad discussions of pricing techniques but overlooks tax issues. In reality, a state-owned company loses its privilege of paying no taxes once it...

The authors explore the relationship between fiscal rules and capital budgeting. The current budgetary approach to limit deficits to a fixed portion of GDP or to balance budgets could undermine incentives to invest in public capital with long-run returns since politicians concerned about...

Examines implementation issues related to a flat expenditure tax and VAT. Considers complexity, transition arrangements, international issues and federal-state fiscal harmony, and concludes that neither of these reform measures would lead to a simplification of the tax system compared to the...

Fiscal policy in Latin America has been guided primarily by short-term liquidity targets whose observance was taken as the main exponent of fiscal prudence, with attention focused almost exclusively on the levels of public debt and the cash deficit. Very little attention was paid to the effects...

Corporate tax with interest deductibility may reduce risk taking because entrepreneurs might decrease the amount of investment in risky projects with higher corporate tax rates. Unlike Stiglitz' "Corporation Tax", we allow for decreasing returns to scale and equity financing of capital. We show...