Tax revenues, fiscal corruption and “shame” costs

In this paper we explore tax revenues in a regime of widespread fiscal corruption in a static framework. We prove that the relationship between the tax rate and tax revenues depends on the relevance of the “shame effect” of being detected in a corrupt transaction. In countries with a “low shame” effect, tax revenues grow as the tax rate increases. Moreover, there is a critical tax rate where the growth rate of tax revenues begins to reduce. In countries with a high “shame effect” tax revenues increase up to a threshold value and then decrease

Corruption, evasion and environmental policy: a game theory approach

This paper deals with the interaction between polluting firms, tax inspectors and politicians in a corrupted context. We construct a theoretical game model with incomplete information to discuss the effects of such interaction on environmental policy. In this respect, we believe that the State may pursue environmental protection by employing two alternative strategies: on the one hand, the State can, through greater incentive for the tax inspector, increase the monitoring level that reduces the evasion and thus increase tax revenues (incentive channel); on the other hand, the State can, through greater environmental expenses, increase the compliance of the polluting firm which means lower evasion and, thus greater tax revenues (compliance channel). Clearly, more environmental expenses mean, ceteris paribus, less public resources for the tax inspector's incentive, and vice versa. In this context, we demonstrate that, for a country with a high (low) level of incentives, the incentive (compliance) channel is more efficient than the compliance (incentive) channel. This is a pre-copyedited, author-produced PDF of an article accepted for publication in IMA Journal of Management Mathematics following peer review. The version of record Corruption, evasion and environmental policy: a game theory approach is available online at: https://doi.org/10.1093/imaman/dpu01

Economic growth, corruption and tax evasion

In this paper, we explore tax revenues in a regime of widespread corruption in a growth model. We develop a Ramsey model of economic growth with a rival but non-excludable public good which is financed by taxes which can be evaded via corrupt tax inspectors. We prove that the relationship between the tax rate and tax collection, in a dynamic framework, is not unique, but is different depending on the relevance of the “shame effect”. We show that in all three cases — “low, middle and high shame” countries, the growth rate increases as the tax rate increases up to a threshold value, after which the growth rate begins to decrease as the tax rate increases. But, for intermediate tax rates, the rate of growth for “low shame” countries is lower than that of “uniform shame” countries which is, in turn, lower than that of “high shame” countries. This happens because the growth rate is more sensitive to variations of t in an honest country rather than in a corrupt country

Corruption, growth and ethnic fractionalization: a theoretical model

This paper analyzes the existing relationship between ethnic fractionalization, corruption and the growth rate of a country. We provide a simple theoretical model. We show that a nonlinear relationship betweenfractionalization and corruption exists: corruption is high in homogeneous or very fragmented countries, but low where fractionalization is intermediate. In fact, when ethnic diversity is intermediate, constituencies act as a check and balance device to limit ethnically-based corruption. Consequently, the relationship between fractionalization and growth rate is also non-linear: growth is high in the middle range of ethnic diversity, low in homogeneous or very fragmented countries

The sooner the better: lives saved by the lockdown during the COVID-19 outbreak. The case of Italy

Summary This paper estimates the effects of non-pharmaceutical interventions – mainly, the lockdown – on the COVID-19 mortality rate for the case of Italy, the first Western country to impose a national shelter-in-place order. We use a new estimator, the augmented synthetic control method (ASCM), that overcomes some limits of the standard synthetic control method (SCM). The results are twofold. From a methodological point of view, the ASCM outperforms the SCM in that the latter cannot select a valid donor set, assigning all the weights to only one country (Spain) while placing zero weights to all the remaining. From an empirical point of view, we find strong evidence of the effectiveness of non-pharmaceutical interventions in avoiding losses of human lives in Italy: conservative estimates indicate that the policy saved in total more than 21,000 human lives

Multicontroller: an object programming approach to introduce advanced control algorithms for the GCS large scale project

The GCS (Gas Control System) project team at CERN uses a Model Driven Approach with a Framework - UNICOS (UNified Industrial COntrol System) - based on PLC (Programming Language Controller) and SCADA (Supervisory Control And Data Acquisition) technologies. The first' UNICOS versions were able to provide a PID (Proportional Integrative Derivative) controller whereas the Gas Systems required more advanced control strategies. The MultiController is a new UNICOS object which provides the following advanced control algorithms: Smith Predictor, PFC (Predictive Function Control), RST* and GPC (Global Predictive Control). Its design is based on a monolithic entity with a global structure definition which is able to capture the desired set of parameters of any specific control algorithm supported by the object. The SCADA system -- PVSS - supervises the MultiController operation. The PVSS interface provides users with supervision faceplate, in particular it links any MultiController with recipes: the GCS experts are able to capture sets of relevant advanced control algorithm parameters to reuse them later. Starting by exposing the MultiController object design and implementation for a PVSS and Schneider PLC solution, this paper finishes by highlighting the benefits of the MultiController with the GCS applications

A game for exploring political and bureaucratic corruption

This article deals with the relationship between bureaucratic corruption and political corruption from the perspective of the industrial structure of a country. In so doing, we discuss whether political corruption and bureaucratic corruption can coexist. For this purpose, a suitable theoretical game model with imperfect information is constructed and solved.We demonstrate that the size of capital of a specific firm influences the decision of such firm to bribe the bureaucrat or lobby the government. Therefore, political and bureaucratic corruption are substitutes at the level of the firm because they depend on the capital of the firm, but they can coexist at a macro level. Some numerical experiments validate the theoretical model

Political Corruption

Political corruption represents a specific type of public-to-public corruption which implies that one participant of corrupt transaction belongs on the State and the other to the private sector: in fact, public corruption is a particular (and, illegal) State-society relationship. Political corruption occurs when politicians, who are delegated to make laws and enforce them by the citizens, act themselves in a corrupt way. More precisely, it appears when policymakers exploit their political strength to pursue their own economic benefits and/or maintain their powerful position

Corruptibility and tax evasion

Reduction of fiscal evasion may be pursued by introducing incentive schemes for tax inspectors. The aim of this paper is to explain the role of such bonuses in an economic environment with corruption, i.e. in a world where entrepreneurs and tax inspectors are open to bribery. In detail, we analyze the role of a public incentive scheme, where the tax inspector’s bargaining strength is endogenous with respect to an incentive mechanism: indeed the knowledge that even if an entrepreneur does not agree to pay the bribe, s/he can report tax evasion and be partly rewarded for this, increases the tax inspector’s bargaining strength. This is a post-peer-review, pre-copyedit version of an article published in European Journal of Law and Economics. The final authenticated version is available online at: http://dx.doi.org/10.1007/s10657-013-9406-

Optimization Problems

This issue deals with the conceptualization of an optimization problem. In particular, we first provide a formal definition of such a mathematical concept. Then, we give some classifications of the optimization problems on the basis of their main characteristics (presence of time dependence and of constraints). In so doing, we also outline the standard techniques adopted for seeking solutions of an optimization problem. Lastly, some examples taken by the classical theory of economics and finance are proposed