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Does tax enforcement counteract the negative effects of terrorism? A case study of the Basque Country

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  • Luca Salvadori

    (Universitat de Barcelona & IEB, TARC)

Abstract

This paper analyses the impact of terrorism on tax enforcement policies by focusing on the case of the Basque Country. The presence of externalities in tax administration attributable to the costs of terrorism is investigated by undertaking a theoretical analysis. The findings of this are tested using Spanish data extracted from repeated surveys and other sources. By employing ordered response models, evidence is found of the negative impact of terrorism on tax enforcement as it is perceived by residents in the Basque Country and Navarre. In particular, this impact is found to be stronger for entrepreneurs and liberal professionals. No significant impact is found for individuals resident in the rest of Spain.

Suggested Citation

  • Luca Salvadori, 2015. "Does tax enforcement counteract the negative effects of terrorism? A case study of the Basque Country," Working Papers 2015/9, Institut d'Economia de Barcelona (IEB).
    • Handle: RePEc:ieb:wpaper:doc2015-9
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    References listed on IDEAS

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    Cited by:

    1. Haoran Xu & William J. Moser, 2022. "Terrorism and Corporate Tax Avoidance," Abacus, Accounting Foundation, University of Sydney, vol. 58(1), pages 174-208, March.

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    More about this item

    Keywords

    Tax administration and auditing; fiscal externalities; terrorism;
    All these keywords.

    JEL classification:

    • H83 - Public Economics - - Miscellaneous Issues - - - Public Administration
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • D74 - Microeconomics - - Analysis of Collective Decision-Making - - - Conflict; Conflict Resolution; Alliances; Revolutions

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