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Optimal Institutions Under Persistent Tax Uncertainty

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  • Victor Peirone

Abstract

Various economic models ignore the complexity of green field investment and do not assign a fundamental role to institutional uncertainty on the decision making of capital expenditures. These assumptions can be applicable to developed nations, but do not certainly fit into emerging economies. We found that countries with greater volatility in taxation invest less on average. In the Argentine case, this country is among the 1/8 highest tax volatility and lowest investment economies in a sample of ninety nations. Here we explore a tool kit to analyze policies and institutional arrangements to improve pareto optimal outcome.

Suggested Citation

  • Victor Peirone, 2022. "Optimal Institutions Under Persistent Tax Uncertainty," CEMA Working Papers: Serie Documentos de Trabajo. 839, Universidad del CEMA.
    • Handle: RePEc:cem:doctra:839
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    More about this item

    JEL classification:

    • E - Macroeconomics and Monetary Economics
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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