Audit probability versus effectiveness: The Beckerian approach revisited

The Beckerian approach to tax compliance examines how a tax authority can maximize social welfare by trading-off audit probability against the fine rate on undeclared tax. This paper offers an alternative examination of the privately optimal behavior of a tax authority tasked by government to maximize expected revenue. The tax authority is able to trade-off audit probability against audit effectiveness, but takes the fine rate as fixed in the short run. I find that the tax authority's privately optimal audit strategy does not maximize vol- untary compliance, and that voluntary compliance is non-monotonic as a function of the tax authority's budget. Last, the tax authority's privately optimal effective fine rate on undeclared tax does not exceed two at interior optima

The promotion of wellbeing: A primer for policymakers

There is growing international interest among policymakers in the promotion of wellbeing as an objective of public policy. Recent advances in the definition and measurement of wellbeing are giving rise to an increasingly detailed picture of the factors that determine how people think and feel about their lives. Patterns in reported wellbeing show markedly different development over time to measures of GDP per capita and life expectancy often used as proxies for wellbeing by policymakers. However, the concept of wellbeing remains poorly understood by many policymakers and much of the evidence base is extremely recent. I therefore review the current state of the literature on the definition, measurement, and determinants of wellbeing, and discuss some of its implications for public policy.This paper forms part of the work undertaken under ESRC grant RES-192-27-0014

Self-employment, wage employment and informality in a developing economy

This article has been made available through the Brunel Open Access Publishing Fund.We construct a simple model incorporating various urban labour market phenomena obtaining in developing economies, and we give a diagrammatic formulation of the market equilibrium. Our initial formulation assumes an integrated labour market and allows for entrepreneurship, self-employment, and wage employment. We then introduce labour market segmentation. In equilibrium voluntary and involuntary self-employment, formal and informal wage employment, and formal and informal entrepreneurship may all coexist. We illustrate the model by an example calibrated on Latin American data, examining individual labour market transitions and implications of education/training and labour market policies

Divergence in credit ratings

During the recent credit crisis credit rating agencies (CRAs) became increas- ingly lax in their rating of structured products, yet increasingly stringent in their rating of corporate bonds. We examine a model in which a CRA operates in both the market for structured products and for corporate debt, and shares a common reputation across the two markets. We find that, as a CRA s reputation becomes good enough, it can be optimal for it to infl ate its ratings with probability one in the structured products market, but in flate its ratings with a probability zero in the corporate bond market

A Procedure For Computing Hydrocarbon Strain Energies Using Computational Group Equivalents, With Application To 66 Molecules

A method is presented for the direct computation of hydrocarbon strain energies using computational group equivalents. Parameters are provided at several high levels of electronic structure theory: W1BD, G-4, CBS-APNO, CBS-QB3, and M062X/6-31+G(2df,p). As an illustration of the procedure, strain energies are computed for 66 hydrocarbons, most of them highly strained

Gov-aargh-nance - "even criminals need law and order"

We present a theoretical model postulating that the relationship between crime and governance is "hump-shaped" rather than linearly decreasing. State failure, anarchy and a lack of infrastructure are not conducive for the establishment of any business. This includes illegal businesses, as criminals need protection and markets to convert loot into consumables. At the bottom end of the spectrum, therefore, both legal business and criminal gangs benefit from improved governance, especially when this is delivered informally. With significant improvements in formal governance criminal activities decline. We use data from the International Maritime Bureau to create a new dataset on piracy and find strong and consistent support for this non-linear relationship. The occurrence, persistence and intensity of small-scale maritime crime are well approximated by a quadratic relationship with governance quality. Organised crime benefits from corrupt yet effective bureaucrats, and informally governed areas within countries.

Gov-aargh-nance: "Even Criminals Need Law and Order"

We present a theoretical model postulating that the relationship between crime and governance is "hump-shaped" rather than linearly decreasing. State failure, anarchy and a lack of infrastructure are not conducive for the establishment of any business. This includes illegal businesses, as criminals need protection and markets to convert loot into consumables. At the bottom end of the spectrum, therefore, both legal business and criminal gangs benefit from improved governance, especially when this is delivered informally. With significant improvements in formal governance criminal activities decline. We use data from the International Maritime Bureau to create a new dataset on piracy and find strong and consistent support for this non-linear relationship. The occurrence, persistence and intensity of small-scale maritime crime are well approximated by a quadratic relationship with governance quality. Organised crime benefits from corrupt yet effective bureaucrats, and informally governed areas within countries.Governance, Crime, Piracy, Informal Institutions, Law enforcement

Voluntary Disclosure Schemes for Offshore Tax Evasion: An Analysis

In recent years tax authorities worldwide have implemented voluntary disclosure schemes to recover tax on offshore investments. Such Schemes are characterized by the acquisition of non-audit information on offshore holdings, and a subsequent opportunity for affected taxpayers to make a voluntary disclosure. Accepted disclosures are subject to a discounted .ne rate, but verified under-disclosure attracts a higher penalty. We characterize the optimal Scheme and show that an optimal Scheme can generate a Pareto-improvement over the optimal auditing equilibrium without a Scheme, and can stimulate legitimate offshore investment activity. We show when a tax authority optimally gives incentives for truthful disclosure, and when it does not. The analysis yields practical design insights for policymakers

Equitable Representation in the Councils of the United Nations: Theory and Application

We develop a theoretical framework for equity in council voting games (CVGs). In a CVG, a fully representative voting body delegates decision-making to a subset of the members, as describes, e.g., the United Nations Security Council (UNSC). Three equity concepts are proposed: ex-ante (procedural) equity, ex-post (outcome) equity and regional equity. The last two concepts are consistent with a new square-root rule on the probability of council membership, but no CVG can meet all three concepts. We apply our framework to evaluate the equitability of the UNSC, and the claims of those who seek to reform it

GOV-AARGH-NANCE – “EVEN CRIMINALS NEED LAW AND ORDER”

We present a theoretical model postulating that the relationship between crime and governance is “hump-shaped”, rather than linearly decreasing, when criminals need access to markets. State collapse, violent conflict and a lack of infrastructure are not conducive for the establishment of any business, legal or illegal. At the bottom end of the spectrum, therefore, criminal gangs benefit from improved governance, especially when this is delivered informally. With significant improvements in formal governance criminal activities decline. We use data from the International Maritime Bureau to create a new dataset on piracy and find strong and consistent support for this non-linear relationship.Governance; Crime; Piracy; Informal governance; Law enforcement