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This paper provides evidence from a fragile state that citizens demand more of a voice in the government when it tries to tax them. I examine a field experiment randomizing property tax collection across 356 neighborhoods of a large Congolese city. The tax campaign was the first time most citizens had been registered by the state or asked to pay formal taxes. It raised property tax compliance from 0.1%in control to 11.5% in treatment. It also increased political participation by about 5 percentage points (31%): citizens in taxed neighborhoods were more likely to attend townhall meetings hosted by the government or to submit evaluations of its performance. To participate in these ways, the average citizen incurred costs equal to their daily household income, and treated citizens spent 43% more than control. Treated citizens also positively updated about the provincial government, perceiving more revenue, less leakage, and a greater responsibility to provide public goods. The results suggest that broadening the tax base has a 'participation dividend,' a key idea in historical accounts of the emergence of inclusive governance in early modern Europe and a common justification for donor support of tax programs in weak states.

Does joint taxation disadvantage women? To answer that question, this paper begins by reviewing unitary and bargaining models of intrafamily allocation, and then discusses the determinants of "bargaining power" in a world without taxes. It argues that wage rates rather than earnings are determinants of bargaining power, and then argues that productivity in household production is also a source of bargaining power. In the absence of human capital effects, joint taxation does not appear to disadvantage women in either divorce threat or separate spheres bargaining. Hence, the claim that joint taxation disadvantages women, if it is correct, depends on effects that operate through the incentives to accumulate human capital. But a satisfactory analysis of the effects of taxation on human capital awaits the further development of dynamic models of family bargaining. -- Joint taxation ; family bargaining ; household production

Based on interviews and a questionnaire answered by 25 factory directors in November 1988 in the PRC, this paper investigates director-level and enterprise-level factors that affect the bargaining power of Chinese factories. It shows that directors of larger, higher-ranking factories feel they are more successful in preserving autonomy and gaining exemptions and concessions from their supervisory agencies on salary and bonus pools and distribution, tax rates, and cadre personnel decisions. (DÜI-Sen)

We construct a political equilibrium in which employers and labour unions bargain over labour contracts, wage-earners and profit-earners lobby the government for taxation and labour market regulation, and labour market legislation must be accepted by the majority of voters. We show that the voters rule out profit sharing, because otherwise the government would capture all the gain. Furthermore, if it is much easier to tax wages than profits, then the government protects union power by regulation in the labour market. In such a case, the political equilibrium is characterized by strong union power and right-to-manage bargaining, which causes involuntary unemployment.

Coase's seminal 1960 paper on externalities is associated with the so-called Coase Theorem which is stated in the literature in many forms. However, its main thrust was less to state a theorem than to challenge Pigou's earlier insistence on the need for government intervention through Pigouvian taxes to achieve internalisation of externalities. Coase argued instead that private party bargaining can be relied upon to internalise externalities, but equally insisted that establishing clear and firm property rights is a precondition to successful internalisation achieving bargaining. Similar thinking has lead to clear definitions of property rights becoming a key part of World Bank conditionality in the environmental area. This paper discusses the underpinnings of this position, arguing that it is little researched and subject to challenge. We first show how Coase only considered one type of property right, and where others such as compensation rights are allowed for the property right assignment will itself directly achieve internalisation with no need for further bargaining. We also show how ambiguous property rights can dominate a clear assignment of property rights for a case where recipients of damage can move to avoid damage, but must remain and actually receive damage in order to be recipients of compensation. Rights to either polluters to pollute, or to recipients of damage to compensation create a distortion; and either outcome is dominated by no assignment of property rights, but a tax on polluters (Pigouvian tax) with revenues redistributed equally to the whole population.

In this paper, we study the impact of tax policy on wage negotiations, workers' effort, and employment when effort is only imperfectly observable. We show that the different wage-setting motives – rent sharing and effort incentives – reinforce the effects of partial tax policy measures but not necessarily those of more fundamental tax reforms. We show that a higher degree of tax progression always leads to wage moderation, but the well-established result from the wage bargaining literature that a revenue-neutral increase in the degree of tax progression is good for employment does not carry over to the case with wage negotiations and imperfectly observable effort. While it remains true that introducing tax progression increases employment, we cannot rule out negative employment effects from an increase in tax progression when tax progression is already very high. ; In einem Modell mit Lohnverhandlungen und unvollständiger Beobachtbarkeit individueller Arbeitsanstrengungen zeigen wir, dass sich die verschiedenen Motive bei der Lohnfindung – Verteilung von Renten zwischen Arbeitgeber und Arbeitnehmern, Effizienzlohnerwägungen – sich in ihren Wirkungen gegenseitig verstärken. Für die Auswirkungen der Steuerpolitik auf die Beschäftigung bedeutet dies, dass eine progressivere Ausgestaltung des Steuersystems grundsätzlich zu mehr Lohnmoderation führt. Da eine höhere Steuerprogression jedoch zugleich die individuellen Anstrengungsanreize verringert, ist der Beschäftigungseffekt einer Steuerreform, die die Progression erhöht, a priori nicht eindeutig. Das aus der Lohnverhandlungsliteratur bekannte Ergebnis, dass Steuerprogression gut für die Beschäftigung sei, lässt sich somit in einem allgemeineren Modellrahmen nicht bestätigen. Zwar ist die Beschäftigung bei einem moderat progressiven Steuersystem generell höher als bei einem proportionalen Steuersystem, doch lassen sich negative Beschäftigungseffekte bei einer weiteren Erhöhung der Steuerprogression nicht ausschließen.

The purpose of this paper is to study toll and investment competition along a serial transport corridor competition allowing for partial cooperation between regional governments. Partial cooperation is modeled as a Nash bargaining problem with endogenous disagreement points. We show that the bargaining approach to partial cooperation implies lower tolls and higher quality and capacity investment than fully noncooperative behavior. Moreover, under bargaining, strategic behavior at the investment stage induces regions to offer lower quality and invest less in capacity as compared to full cooperation. Finally, Nash bargaining partially resolves the problem of welfare losses due to toll and capacity competition pointed out in the recent literature.

A key obstacle to reducing payroll taxes in many industrialized and transition countries is the direct revenue loss to the government that it implies. This paper studies a simple and practical labor tax reform of reducing a payroll tax and increasing a progressive wage tax that keeps the marginal tax wedge unchanged. Such a strategy increases employment, reduces the equilibrium unemployment rate, and increases public revenue as long as workers do not have all the bargaining power in wage negotiations. Moreover, welfare rises if workers' bargaining power is sufficiently large to exceed a critical value determined by the second-best Hosios condition.