Dina Pomeranz
Assistant Professor of Microeconomics, endowed by the UBS Center
Zurich ZCED
No modern state can exist in the long term without effective taxation. Recent research emerging from close collaboration of academics with tax authorities has shed new light on how states can build such tax capacity. Using both randomized and natural experiments, these partnerships have not only opened access to new types of data, but have also stimulated new perspectives and research questions. While much of research in public finance had historically assumed that a tax in the law is a tax that is collected, exciting new research takes an empirical look inside the black box of tax administration. It addresses issues ranging from the role of information and digitalization, to taxpayer behavior or the link between taxation and citizens’ relationship to the state. This paper provides a brief overview of some of this research, as well as practical advice for those interested in implementing research in partnership with tax authorities or other large public entities.
In a fruitful iterative cycle, this strand of the literature both tests existing theories and provides empirical puzzles that can generate new theoretical hypotheses. The wide range of geographical, economic and cultural contexts in which these research projects are undertaken, allows to build an increasingly rich picture of the mechanisms at play. Both theory and replications help gaining a deeper understanding about which effects are very context-specific, and which mechanisms seem to be robust across many settings.
As this strand of the literature grows, many additional research topics remain to be explored, including in areas such as the impact of tax enforcement on real economic activity, the role of social norms, the distributional implications of tax policies and tax enforcement, the role of discrimination in tax administration or the interplay of politics and power with taxation.
Assistant Professor of Microeconomics, endowed by the UBS Center
Zurich ZCED
Post-Doc
Center for International Development, Harvard University
Research Manager
Zurich ZCED