Tax compliance costs tend to be disproportionately higher for small and young businesses. This paper examines how the quality of tax administration affects firm performance for a large sample of firms in emerging market and developing economies. We construct a novel, internationally comparable, and multidimensional index of tax administration quality (the TAQI) using information from the Tax Administration Diagnostic Assessment Tool. We show that better tax administration attenuates the productivity gap of small and young firms relative to larger and older firms, a result that is robust to controlling for other aspects of tax policy and of economic governance, alternative definitions of small and young firms, and measures of the quality of tax administration. From a policy perspective, we provide evidence that countries can reap growth and productivity dividends from improvements in tax administration that lower compliance costs faced by firms.

This paper describes a new, comprehensive database of tax policy measures in 23 advanced and emerging market economies over the last four decades. We extract this information from more than 900 OECD Economic Surveys and 37,000 tax-related news from the International Bureau of Fiscal Documentation using text-mining techniques. The innovation of this dataset lies in its granularity: changes in the rates and bases of personal and corporate income taxes, value added and sale taxes, social security contributions, excise, and property taxes are systematically documented. In addition, the database provides information on the announcement and implementation dates, whether the measures represent major changes, are part of a broader tax package, and phased in over several years. The paper also presents a range of stylized facts suggesting that information from this database is useful to deepen the analysis of tax policy changes for research and policy purposes.

Self-assessments by respondents in surveys are often the only available measure of tax evasion in developing countries at the microeconomic level. However, they suffer from the reluctance of respondents to reveal their own illicit behavior. This paper evaluates whether this weakness of self-assessments can at least partially be overcome through a novel questioning method, the crosswise model, which allows estimating the prevalence of tax evasion, but not identifying whether the individual respondent engages in tax evasion or not. Using evidence from Serbia, we show that crosswise model-based estimates of the share of firms which significantly underreport sales exceed those obtained from conventional methods by around 10 % points or more. With respect to wage underreporting to evade payroll tax and social security contributions, we do not find differences. These results appear to be robust to a number of modifications, and we explore various potential causes that lead to these results.

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This paper exploits the unique institutional features of South Africa to estimate the impact of provincial public spending on …rm productivity. In contrast to existing microeconomic evidence, we explore the e¤ects of …scal expenditures and remove the e¤ects of revenue raising policies. Our identi…cation strategy is based on di¤erences in the e¤ects of public spending across …rms within the same industry and province. We show that public spending composition a¤ects productivity depending on the capital intensity of …rms, with less capital intensive …rms being particularly a¤ected. These e¤ects appear to be robust.JEL code: D24, H32, H72