Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis

Benno Torgler and Friedrich Schneider ()

No 04-2007, Working Papers from Institute of Local Public Finance

Abstract: The following paper examines the different options to finance local public infrastructure in Ethiopia based on the assumption that the federal government of Ethiopia will not provide any guarantees for local borrowing. Besides a detailed description of the local public finance system and the capital market in Ethiopia, the paper also sets out some international successful practices in municipal infrastructure financing. Based on the observation of the Ethiopian case and the consideration of the international experiences, the paper has two major pillars that very specifically identify actions required for implementation. On the one hand, the paper recommends a number of feasible arrangements to generate a revenue enhancement of the local authorities in the existing intergovernmental framework. On the other hand, the paper suggests a solution - for creditworthy as well as for potentially creditworthy urban local governments (ULG) - to finance their future demand of public infrastructure together with the national finance institutions as well as the international donors.

Keywords: Shadow economy; tax morale; governance quality; government intervention; corruption (search for similar items in EconPapers)
JEL-codes: D73 D78 H2 H26 O17 O5 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2007-12
New Economics Papers: this item is included in nep-afr, nep-dev and nep-pbe
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Citations: View citations in EconPapers (118)

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Related works:
Working Paper: Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis (2007)
Working Paper: Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis (2007)
Working Paper: Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis (2007)
Working Paper: Shadow Economy, Tax Morale, Governance and Institutional Quality: A Panel Analysis (2007)
Working Paper: Shadow economy, tax morale, governance and institutional quality: A panel analysis (2007)
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