The literature on optimal income taxation has operated on the assumption that wage rates are generated exogenously by innate ability and therefore do not respond to behavior and taxation. This is in stark contrast to a large empirical literature documenting a strong effect of work effort on...

We present a framework for the analysis of tax and benefit policy in countries with significant informality. Our framework allows us to jointly analyse the effects of various taxes and benefits on incentives for firms and workers to be informal and evade taxation. We find that payroll taxes and...

We design a field experiment to study how the allocation of authority between frontline procurement officers and their monitors affects performance both directly and through the response to incentives. In collaboration with the government of Punjab, Pakistan, we shift authority from monitors to...