Weak Liberalism and Weak Property Taxation in Latin America*

Mahon, James Edwin

doi:10.1017/9781108655934.008

Cited by 1 publication

(1 citation statement)

References 37 publications

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“…Despite potentially more well-defined individual benefits in this context, two meta studies of field experiments find modest evidence for effective formalization interventions, with inspections and increased benefits tending to show the strongest results (Floridi,Demena,1 Property taxes might also help curbing high inequality in the region (Martorano, 2018;De Cesare, 2012). On low revenues, see Mahon (2019), Corbacho, Cibils, and Lora (2013), and Bonet, Mu ñoz, and Pineda Mannheim (2014). 2 For simplicity, we write 'registration' throughout, although 4% of the experimental population had already signed up for the online registry and needed to only update or confirm personal information.…”

Section: Introductionmentioning

confidence: 99%

Nudging Taxpayer Registration?: Field Experimental Evidence on Backfiring Incentives

Eguino¹,

Román²,

Schächtele³

2020

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Governments in Latin America raise little revenue from property taxation, despite arguments for its efficiency and equity. Adequate registry information would support consistent collection, but registries are costly to establish and maintain. Compared to tax collection, field experimental evidence on low-cost interventions in this area is scarce. This paper provides the first such evidence for online tax registration. The municipality of Fortaleza, Brazil, randomized 163K property taxpayers into three groups. The first group represents the status quo that did not receive a particular treatment. To the second group, the tax administration sent an e-mail asking for registration; to the third group, an e-mail that additionally offered a lottery reward for successful registration. Relative to the first group, both e-mails increased registration, especially among compliant taxpayers, men, intermediate age groups and intermediate property values. But adding the lottery incentive had a negative effect on registration. We hypothesize that this backfiring effect relates to an inadvertent signal about non-enforcement. Additional evidence from a post-experimental survey suggests that for taxpayers in the lottery group, norm compliance and the usefulness of the online registry were less important reasons to register. In sum, the results suggest that the intervention prompted parts of the population to register and that monetary incentives may be counterproductive.

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Section: Introductionmentioning

confidence: 99%