This paper presents a two-period model, with a utilitarian government and a continuum of taxpayers. In the first period, the government designs the tax law, which comprises taxes and fines to impose on evaders. Contrary to the previous literature on optimal tax-enforcement policies, the...

In this paper we aimed at investigating expenditure smoothing at the subnational level in Argentina. We develop a theoretical model that provides precise predictions about how public expenditures should react to innovations in provincial revenues. We test these predictions using provincial...